Locke Lord QuickStudy: April Fools Prank or Legitimate OCC Guidance on SCRA?

Does the OCC Have a Sense of Humor?
Why would the Office of the Comptroller of the Currency (the OCC) issue a Bulletin on April Fools’ Day?  In the OCC Bulletin 2015-21, issued April 1st 2015, the OCC advised that certain protections of the  Servicemembers Civil Relief Act (SCRA) have been extended for one more year.  Should you believe the OCC?  In short, Yes.  If you don’t believe the OCC, then you can trust Congress.  The guidance is a reminder that Congress extended the one-year SCRA foreclosure protection period until the end of the calendar year.  The SCRA foreclosure protection period has been extended to one-year from 90 days throughout the Financial Crisis.

Overview of SCRA Mortgage Protections
The SCRA provides certain benefits and protections for members of the United States Armed Forces when called to active duty military service.  The SCRA provides protections against foreclosure of real property for a breach of an obligation secured by a mortgage or trust deed, which originated before the period of the servicemember’s military service.1  One such protection is the ability to obtain a stay of those proceedings during the period of military service and for a period of time after military service.2  This period of additional protection was originally 90 days after release from qualifying military service, but has been repeatedly extended to one-year for a limited period of time during the Financial Crisis.3

Public Law 113-286 Extends Foreclosure Protection Period for Servicemembers
On December 18, 2014, President Obama signed into law the Foreclosure Relief and Extension for Servicemembers Act of 2014 (Public Law 113-286), which amends the SCRA.  Public Law 113-286 again extends this period of foreclosure protection for one-year, but as of now, only through the end of this calendar year.  On January 1, 2016 the protection period will revert to 90 days, unless Congress again extends the protection.  In other words, Public Law 113-286 tells us that the Financial Crisis continues to this day for members of the Armed Forces.  A copy of the OCC’s Bulletin 2015-21 is available at http://www.occ.gov/news-issuances/bulletins/2015/bulletin-2015-21.html.

Take Away
Dealing with our Nation’s men and women in uniform is an important part of being a good corporate citizen.  Knowing and understanding not just the SCRA, but also the unique language of the military, is key to providing those men and women with the benefits to which they are entitled.  The failure to adhere to these SCRA requirements carries risk of litigation, public relations issues, as well as potential criminal penalties.

1 50 U.S.C. App. § 533.
2 50 U.S.C. App. § 533(b).
3 See Housing and Economic Recovery Act of 2008, Public Law 110-289, Title II, Section 2203(a) (effective July 30, 2008 with sunset December 31, 2010) and Honoring America’s Veterans and Caring for Camp Lejeune Families Act of 2012, Public Law 112-154, Title VII, Section 710 (extending sunset to December 31, 2014).