Making Sure Soldiers Have Homes for the Holidays

November 20, 2012 at 8:11 am 1 comment

The Office of Comptroller of the Currency released a memo yesterday providing banks a reminder and brief overview of amendments made to the Soldiers And Sailors Civil Relief Act that become effective on February 2, 2013.  The legislation provides that a sale, foreclosure, or seizure of property based on a soldier’s delinquency is not valid if made during the period of military service or within one year thereafter, unless it is made pursuant to a court order or a waiver by the service member.  In addition, the court may order a hearing.  The law currently extends the injunction to the first nine months after the service member returns from active duty.  Your compliance officer might want to set up a reminder that the new law only remains in effect until December 31, 2014, at which point the injunction only extends to the first 90 days after a service person returns from active duty.  I’m not sure why, but the SCRA has been a source of confusion in credit union land.  Just remember that the purpose of the law is not to  prevent soldiers from having to pay their debts, but simply to ensure that they are not put in a worse position financially because of their service.  That’s why the law’s protections generally apply only to loans and mortgages that soldiers enter into prior to active duty.

Incidentally, “I’ll be home for Christmas” was released by Bing Crosby in 1943 and was a top ten hit as many Americans were spending their first Christmas away from the family to fight in World War II.  This song came to mind because my office is piping in music from one of those stations  playing nonstop Christmas music since July 4.  I exaggerate slightly but I wish the CFPB would utilize some of its dictatorial powers to do what is best for the American consumer and ban all Christmas music before Thanksgiving Day and only allow the playing of nonstop Christmas music within a week of Christmas.

Signs of a housing recovery

 Yesterday brought further signs that the economy is recovering ever so grudgingly from the mortgage meltdown.  The Wall Street Journal is reporting that sales of previously owned homes were stronger than expected in October, putting them within reach of their highest levels since 2007.  The increase is apparently the result of a decline in the number of houses for sale, which is actually good news since it means that the Country may be working through its backlog of foreclosures.

 The Fiscal Cliff’s. . .of Normandy

 America isn’t the only Country, of course, that’s trying to balance the need for fiscal austerity against the need to foster economic growth.  France received a failing grade on its efforts so far from Moody’s, which took away their Triple A rating.  Why should this concern you?  Because any fiscal recovery in Europe will have to be funded and led by its largest economies.  If France can’t pull its own weight, it’s hard to see how the Euro Zone can get back on its feet any time soon, not to mention maintain a single currency.

Speaking of fiscal cliffs, there’s an excellent article in Politico breaking down the cost savings to the Government of eliminating some of the nation’s most popular tax exemptions.  Bottom line, eliminating these exemptions would not only be politically difficult, but wouldn’t generate nearly enough money to address the country’s fiscal problems.

About this BSA thing…

 As readers of this blog will know, I have very little patience for financial institutions that respond to regulations not by trying to comply with them, but by ignoring them.  This avoidance technique is all the more frustrating to me when the credit union isn’t ignoring a new and complicated legal requirement it simply doesn’t have the time or money to comply with, but is instead ignoring a long-standing, high-profile financial industry requirement.

If your credit union engages in such activities, you will be happy to know you are not alone. Yesterday, FINCEN and the FDIC announced a $15 million fine against First Bank of Delaware, Wilmington, for violations of the BSA and AML laws and regulations.  According to legal documents, the bank simply neglected to carry out basic regulatory requirements such as monitoring account transactions for suspicious activity and flagging accounts which represented a high-risk of money-laundering activity such as business accounts for  third-party processors.  My personal favorite is that the bank neglected to have a Bank Secrecy Act Officer for several years.




Entry filed under: Compliance, Economy, General, Legal Watch, Political, Regulatory. Tags: , , , .

CFPB Pushes Back January Compliance Date For Mortgage Disclosure Requirements It’s Mandate Relief Monday!

1 Comment Add your own

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Authored By:

Henry Meier, Esq., General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association.

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