Shaun Harms – Bankers Assurance, LLC SCRA and MLA Shaun Harms – Bankers Assurance, LLC

SCRA Protections The law protects members of the Army, Navy, Air Force, Marine Corps and Coast Guard, including members of the National Guard, as they enter military service (active duty), as well as commissioned officers of the Public Health Service and the National Oceanic and Atmospheric Administration engaged in active service.

SCRA Eligibility The SCRA covers all active duty servicemembers, reservists and the members of the National Guard while on active duty. The protection begins on the date of entering active duty and generally terminates within 30 to 90 days after discharge.

SCRA – Things to consider 6% max interest rate Retroactive Waiving of late fees Checking prior to foreclosure action Notice on 1-4 family loans

SCRA How are you monitoring the loans? Are you tracking on the system? Does the LO notify you?

Military Lending Act ● Military Annual Percentage Rate (MAPR) cannot exceed 36% ○ At origination of closed-end loan ○ During any billing cycle for open-end lines and credit cards ● Disclosures required: ○ Statement of the MAPR (both orally and in writing) ○ Description of payment obligation (both orally and in writing) ○ Standard Truth-in-Lending disclosures (in writing)

Military Lending Act With some exceptions, the MLA applies to open- and closed-end consumer purpose loans (effective 10/3/2016) and credit cards (effective 10/3/2017) to a covered borrower if the loan or account is: ● Subject to a finance charge, or ● Payable in more than 4 installments.

Military Lending Act The following are examples of covered loans: ● Unsecured personal loan/line of credit ● Loan secured by title to an already-owned vehicle ● Loan secured by the covered borrower’s deposit account ● Loan secured by a vacant lot, unless the loan proceeds will be used to construct a dwelling on the land that secures the loan.

Military Lending Act The MLA does not apply to: ● Residential mortgage loans (secured by a 1-4 unit dwelling) ● Loans expressly to purchase a motor vehicle if the vehicle secures the loan (no additional funds may be advanced above the purchase price) ● Loans expressly to purchase personal property if the personal property secures the loan (no additional funds may be advanced above the purchase price) ● Loans that are exempt from Regulation Z coverage ● Loans to non-covered borrowers

Military Lending Act The MLA applies to: ● Servicemembers who are on active duty when the loan is originated or the account is opened (if the call or order specifies a period of more than 30 days) ● Dependents of the active duty servicemember MLA coverage ends when the servicemember’s active duty ends. You are not required to monitor the borrower’s status during the life of the loan.

Military Lending Act To receive safe harbor: ● Status must be determined via either the MLA database or a credit report ● The consumer’s status must be checked: ○ No more than 30 days prior to the date of the transaction or the date the consumer applies to establish an account; ○ No more than 60 days prior to a firm offer of credit being provided to a consumer and to which the consumer has responded (if the consumer doesn’t respond within 60 days, a new determination must be performed); ○ Whenever a new account is established for the covered borrower, AND ● Documentation of determination of the borrower’s status must be retained.

Military Lending Act You may not access the MLA database after a loan is originated or an account is opened for the purpose of determining whether the consumer WAS a covered borrower. However, you may access the database during the term of the loan or account to determine whether the consumer continues to be covered.

Military Lending Act Closed-end loans: ● MAPR must be calculated when loan is originated Open-end lines and credit cards: ● MAPR must be calculated for each billing cycle

Military Lending Act What is the MAPR? Why does it matter? What have a MLA related loan?

Military Lending Act Disclosures must be provided both orally and in writing (in a form the borrower can keep). There is no requirement that the oral and written disclosures of the payment obligation be identical. You may establish a toll-free number that consumers can use to receive the disclosures (this number must appear on either the application form or be provided with the statement of MAPR).

Military Lending Act Things to consider Loans where a credit report is not pulled Vacant land loans

Military Lending Act The rule adds language to reflect the civil liability provisions for violation of the Act: ● Any actual damage sustained as a result, but not less than $500 for each violation; ● Appropriate punitive damages; ● Appropriate equitable or declaratory relief; ● Any other relief provided by law; and ● Costs of the action, including attorney fees as determined by the court.

Military Lending Act “(c) Contract void. Any credit agreement, promissory note, or othercontract with a covered borrower that fails to comply with 10 U.S.C.987 [the MLA] as implemented by this part or which contains one or more provisions prohibited under 10 U.S.C. 987 as implemented by this part is void from the inception of the contract.”

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