On September 28, 2022, the Department of Justice (”DOJ”) announced a settlement with Westlake Financial Services (“Westlake”), a Los Angeles-based indirect auto finance company specializing in subprime and near-subprime loans, resolving allegations that Westlake failed to fully provide interest rate benefits to eligible servicemembers as required under the Servicemembers Civil Relief Act (“SCRA”). … Continue Reading
Servicemembers Civil Relief Act (SCRA)
Washington DFI Extends SCRA Interest Rate Cap to Servicemember Spouses
In its recently published Summer 2019 Newsletter, the Washington State Department of Financial Institutions (“DFI”) reported that it had interpreted the Servicemembers Civil Relief Act (“SCRA”) broadly to apply the SCRA’s 6% interest rate cap to a loan agreement entered into only by a servicemember’s spouse. Generally, the SCRA provides for a 6% interest rate cap during the period of military service for non-mortgage obligations and liabilities “incurred by a servicemember, or the servicemember and the servicemember’s spouse jointly, before the servicemember enters military service[.]” … Continue Reading
Senate Passes Bill That Would Amend SCRA to Expand Spousal Lease Termination Rights
On June 27 the Senate passed the Gold Star Spouses and Spouses of Injured Servicemembers Leasing Relief Expansion Act as part of the Fiscal Year 2020 National Defense Authorization Act (see Sec. 6007). If it becomes law, the bill would amend the SCRA to allow spouses of servicemembers killed or injured during service to terminate certain types of leases.… Continue Reading
South Carolina enacts Servicemembers Civil Relief Act
On April 26, the South Carolina Servicemembers Civil Relief Act (the “Act”) was signed into law and went into immediate effect. The Act seeks to “expand and supplement” the federal Servicemembers Civil Relief Act (“SCRA”), and provides that an SCRA violation constitutes a violation under the Act. The Act expands servicemember protections in a few important ways:
- the Act’s definition of “military service” covers members of the South Carolina National Guard who are on active duty (as defined by the statute) for a period of more than 30 days;
- the Act’s protections extend to dependents of servicemembers engaged in military service; and
- a servicemember may terminate certain types of contracts after receiving “military orders to relocate for a period of service of at least ninety days to a location that does not support the contract” without being subject to an early termination fee.
Democratic Senators Urge Mulvaney to Reconsider MLA Supervision Policy Change
In response to reports that Acting CFPB Director Mick Mulvaney intends to dispense with routine supervisory examinations of creditors for violations of the Military Lending Act (MLA), Senate Democrats sent a joint letter addressed to Mulvaney in his capacity as Director of the Office of Management and Budget—urging him to reconsider.… Continue Reading
Auto-finance companies agree to pay nearly $800,000 to settle Justice Department allegations regarding SCRA auto repossession violations
The United States Department of Justice announced last week that Westlake Services LLC and its subsidiary, Wilshire Consumer Capital LLC, have agreed to pay $760,788 to resolve allegations the companies violated the Servicemembers Civil Relief Act (“SCRA”) by repossessing 70 vehicles owned by SCRA-protected servicemembers without obtaining the required court orders.… Continue Reading
OCC steps up SCRA focus in exams
As we have been reporting, the CFPB has made the Servicemembers Civil Relief Act (SCRA) a major focus and instructs its examiners to look at SCRA compliance during examinations. The OCC has also stepped up its focus on SCRA compliance during examinations of national banks and federal savings associations, according to recent remarks by an OCC official at the 2014 Association of Military Banks of America Workshop. … Continue Reading
Senator Hagan Introduces the Servicemember Higher Education Protection Act
New legislation, titled the Servicemember Higher Education Protection Act (the “Bill”), was introduced recently by Senator Kay Hagan (D-NC). The Bill includes several provisions that expand protections under the Servicemembers Civil Relief Act (SCRA) with respect to student loans.
- The Bill would amend the SCRA to expand the available interest rate limitation for student loans, aligning the protection with that currently applied only to mortgage obligations.