OCC BULLETIN 2016-20
Subject: Servicemembers Civil Relief Act
Date: June 10, 2016
To: Chief Executive Officers and Compliance Officers of All National Banks, Federal Savings Associations, Federal Branches and Agencies, Department and Division Heads, All Examining Personnel, and Other Interested Parties
Description: Extension of Time Period for Certain Protections
This bulletin informs national banks, federal savings associations, and federal branches and agencies of foreign banks (OCC-supervised institutions) of the temporary extension of certain protections under the Servicemembers Civil Relief Act (SCRA), enacted by the Foreclosure Relief and Extension for Servicemembers Act of 2015.
Note for Community Banks
This guidance is applicable to all OCC-supervised institutions that extend loans secured by a mortgage, trust deed, or other similar security to servicemembers.
Section 303 of the SCRA, codified at 50 USC 3953, addresses obligations secured by a mortgage, trust deed, or other security similar to a mortgage on real or personal property owned by a servicemember. The provision applies only to obligations that originated before the servicemember’s military service and for which the servicemember is still obligated.
On March 31, 2016, President Obama signed into law the Foreclosure Relief and Extension for Servicemembers Act of 2015 (Pub. L. 114-142). This act extended again, on a temporary basis, the duration of coverage applicable to the section 303 protections for obligations described above from nine months to one year after a servicemember’s military service. (See OCC Bulletin 2015-21, “Servicemembers Civil Relief Act: Extension of Time Period for Certain Protections.”)
The temporary extension specifies that
This extension ends December 31, 2017. Unless Congress enacts another extension, beginning January 1, 2018, there will be a period of 90 days after the end of the servicemember’s military service during which a foreclosure, sale, or seizure of the servicemember’s property based on a breach of a mortgage, trust deed, or other security, without a court order or waiver, will not be valid. During this period, a court may also stay proceedings enforcing such obligations.
The Housing and Urban Development Act of 1968, 12 USC 1701x(c)(5), requires lenders to send a notice of servicemembers’ rights to borrowers within 45 days of the date a missed payment was due on a mortgage secured by the borrower’s principal residence, unless the borrower pays the past-due amount before the expiration of the 45-day period. The contents of the notice are prescribed in HUD’s “Servicemembers Civil Relief Act Notice Disclosure.”
Please contact the Compliance Risk Division at (202) 649-5470, the appropriate supervisory office, or the Community and Consumer Law Division at (202) 649-6350.
Donna M. Murphy