Servicemembers Civil Relief Act
BuckleySandler is on the forefront of firms handling Servicemember Civil Relief Act (SCRA) compliance, investigations, enforcement actions, and litigation on behalf of banks, mortgage lenders and servicers, and other consumer financial services companies. The SCRA creates substantial business and reputational risks to banks, mortgage lenders and servicers, auto finance companies, credit card issuers, and other consumer finance companies. Not only are the financial penalties steep, the federal regulators and the Department of Justice (DOJ) are actively seeking opportunities to initiate SCRA enforcement actions. Having experienced counsel steeped in the SCRA and very familiar with the regulators who enforce it is indispensable when facing potential legal actions or instituting proactive compliance measures.
In the past four years, we have advised or are still advising 22 clients on more than two dozen SCRA matters. Through a comprehensive and systematic approach to addressing individual SCRA complaints, we have been successful in reducing what at the outset appeared to be thousands of potential SCRA errors to single digits of violations for our clients. In 2011, BuckleySandler served as lead SCRA counsel to two major mortgage servicers in the largest stand-alone SCRA mortgage settlement. Since then, the firm has represented a major student loan servicer in connection with SCRA interest rate allegations. BuckleySandler also has advised creditors in various business lines that are under consent orders, several major banks in connection with SCRA-related allegations by multiple federal agencies, and other clients throughout the financial services industry in numerous capacities.
Our SCRA capabilities and services include:
- Representing clients in investigations and enforcement actions before federal and state agencies;
- Representing clients in SCRA-related litigation matters and other consumer complaints;
Creating and enhancing SCRA compliance programs, policies and procedures, and training programs;
- Testing compliance with existing SCRA policies and procedures;
- Advising clients regarding various SCRA requirements, including the requirements related to foreclosure, default judgment, eviction, interest rate, installment contract, storage liens, and life insurance;
- Reviewing foreclosure files, origination files, and servicing notes for SCRA compliance; and
- Requesting information from the Department of Defense to further research the validity of SCRA complaints.
Select Representative Matters
- In re SCRA Settlement: Represented two mortgage lenders in suit brought by the DOJ alleging failure to comply with SCRA lending requirements and guidelines, including confirming independently whether borrowers were on active duty before initiating nonjudicial foreclosures, and that the credit card unit of one of the companies failed to give a small number of borrowers the SCRA's interest rate cap protection. Multiple cases settled collectively, without admission of fault, for approximately $23 million. Negotiated settlement with the DOJ.
- Advised a major mortgage servicer, a major bank, a top 10 credit card issuer, a top five auto lender in connection with state AG investigations relating to SCRA compliance.
- Assisting top five credit card issuer with enhancing its SCRA policies and procedures, compliance protocols, training programs, and providing advice regarding discrete issues related to the SCRA and consent orders.
- Served as SCRA counsel to a major student loan servicer in connection with SCRA interest rate allegations.