Written By JiJi Bahhur, Regulatory Compliance Counsel
SCRA GAO Study. In its report on the Servicemembers Civil Relief Act (SCRA), the Government Accountability Office (GAO) has determined that prudential regulators, such as NCUA, should conduct more extensive loan file testing for SCRA compliance. Further, the report urges NCUA, among others, to step up their methods for ensuring compliance with the SCRA protections as they relate to mortgage foreclosures.
The GAO study revealed that there have been at least 15,000 instances where institutions have failed to properly reduce a servicemember’s mortgage interest rates and more than 300 improper foreclosures in recent years. The study also revealed that only 48 percent of banks and credit unions have been reviewed for SCRA compliance over the past several years. Of the institutions that did receive a compliance examination, only half involved a loan file review, and even then, only files indicated by the financial institutions as servicemember files were examined.
Further, the GAO found that there was a lack of information sharing among the prudential regulators and other federal departments and agencies charged with SCRA compliance oversight. The GAO stated that if the regulators and agencies were to collaborate with one another, it could lead to more effective supervision and improve awareness.
NCUA has responded to the GAO’s report, stating the conclusions were “reasonable and consistent with your [GAO’s] findings.”
For more information, you can view the GAO Report here.
Smith’s Testimony on Dodd-Frank Financial Oversight Law. The House Financial Services Subcommittee on Oversight and Investigations held a hearing yesterday to learn about the effects of implementing the Dodd-Frank financial oversight law. Specifically, the committee examined the consequences and impact on families, communities, and small businesses. Witnesses from small banks and credit unions testified, including Lynette Smith, President/CEO, of Washington Gas Light Federal Credit Union. Lynette did a great job presenting the case of how a small credit union is impacted by Dodd-Frank. Of course, I knew she would as I had the pleasure of working for her for 2.5 years prior to me joining the NAFCU team.