Crackdown on SCRA Repo Violations- What Dealers Should Know

• By: Amber Hackett Crosby
• On: 10/12/2017 10:34:00
• In: Federal / National Posts
• Comments: 0

What are the SCRA's basic rules, as applied to car dealers? First, there is a 6% interest rate cap on loans. Second, lien holders must get a court order before they can repossess a vehicle from someone who is covered by the SCRA. We receive several calls to TIADA's Compliance Consultation Service from members with questions about the SCRA. Here are a few of the most frequently asked questions:
 
The servicemember is deployed to Afghanistan, and her sister's boyfriend's cousin is driving the car. Does SCRA still apply?
 
Yes, SCRA applies. The SCRA protects members of the armed forces who are on active duty status. It also protects National Guard members who receive activation orders of 30 days or longer. As long as a covered service member signed the retail installment contract and/or financing agreement for a vehicle, then the SCRA's protections apply.
 
How do I know that my customer was really called to active duty?
 
You can verify a customer's military orders on the Department of Defense's Military Lending Act website.
 
Do I have to draw up an entirely new contract that shows that the interest rate is 6%?
 
No. You can draft an Amendment to Vehicle Retail Installment Contract, and say that the finance rate is 6% from the date of the customer's orders until the date that the customer is no longer on active duty.

LINK: When Your Customer is a Soldier (or Sailor, or Airman, or Guardsman)