In light of the recent terrorist attacks and the President's subsequent call-up of various military personnel, the Department of Financial Institutions wishes to remind our state chartered financial institutions about the provisions of the Soldiers and Sailors Civil Relief Act of 1940 (SSCRA) that affect certain financial liabilities of military personnel, including in particular military reservists called to active duty, and new members of the armed forces.
Among its provisions, the act requires financial institutions to lower the interest rate to a maximum of six percent for mortgage, auto and other installment loans incurred by those military personnel prior to active duty for the period of military service. The interest rate includes fees and most other charges.
The act also restricts a financial institution's ability to take default judgements and other judicial actions against active duty military personnel as a result of their failure to perform on loan obligations and restricts an institution's ability to foreclose on mortgages entered into before beginning military service.
In addition to the above, other provisions of the SSCRA may be relevant to your institution's operations or your borrower's circumstances. Therefore, we encourage management to work with your legal counsel and/or trade groups to ensure your institution's compliance with the technical requirements, as well as spirit, of the SSCRA.
If you have any questions, please feel free to contact our office at (615) 741-2236.