iStock_000005983304-capitol-bldg-thumb-225x336-15Think you are in compliance with the Servicemembers Civil Relief Act?  Now would be a good time to make sure since the federal government is increasing its enforcement efforts as part of its Servicemembers and Veterans Initiative.

The Servicemembers Civil Relief Act (SCRA) is a federal law that provides a wide range of protections to eligible servicemembers.  The law’s purpose is to postpone or suspend certain civil obligations so that members of the Armed Forces can focus their full attention on their military responsibilities without adverse consequences for them or their families. The first iterations of this federal law date back to the Civil War.  Contrary to beliefs held by many, the SCRA applies to all companies, not just banks.  The current law is very broad in scope, providing benefits and protections related to rental agreements, security deposits, prepaid rent, evictions, installment contracts, interest rates on all debt: including home loans, credit cards and student loans, mortgage foreclosure, civil judicial proceedings, automobile leases and repossessions, life insurance, health insurance and income tax payments.

The Civil Rights Division of the U.S. Department of Justice (DOJ) is tasked with enforcing the SCRA and has been aggressively doing so since 2011.  The Office of the Comptroller of the Currency (OCC) and the Board of Governors of the Federal Reserve System have also brought enforcement actions in the last few years.  In just the past five years, these agencies have brought more than 35 actions requiring payments in excess of $650,000,000 in fines and remediation.

Through the government’s enforcement actions, it has been retroactively imposing standards that go beyond what is set forth in the statutory text and legislative history.  To make matters more challenging, there has been no public guidance issued as to what the government believes is required in order to comply with the SCRA.  One can glean some of the requirements by reading the Consent Orders from settlements, but unless you have been party to one of these settlements, certain requirements remain unknown.

The number of enforcement actions will almost certainly increase.  On November 2, 2016, DOJ announced a new program, the Servicemembers Civil Relief Act Enforcement Support Pilot Program, to support its enforcement efforts related to protecting the rights of current and former military personnel as part of DOJ’s Servicemembers and Veterans Initiative. The new pilot program funds Assistant U.S. Attorney and trial attorney positions to assist with SCRA enforcement, and also designates military judge advocates currently serving as legal assistance attorneys to serve as Special Assistant U.S. Attorneys to support DOJ’s enforcement efforts related to the SCRA.  U.S. Attorneys throughout the country will also be appointing Initiative Liaisons to work with local military and veteran communities.

We have significant experience representing companies in SCRA enforcement actions and private litigation.  We are also compliance counsel to clients concerned with avoiding an enforcement action by the federal regulators.