May 11, 2009

Salem, Oregon—House Bill 2303 was signed into law on Friday, sending a loud signal to creditors who abuse Oregon's military families. The law now requires financial institutions to conform to the Servicemembers Civil Relief Act (SCRA) laws, and special federal rights held by service members.

The passage of this law is a result of the efforts of strong lobby support of the Oregon War Veterans Association (OWVA), the Oregon State Bar's (OSB) Military Assistance Panel, Salem Attorney Jess Barton, Portland Attorney Mike Mendelson, and Brigadier General Mike Caldwell, Deputy Director of the Oregon Military Department who gave much support during the legislative hearings.

The law is affectionately now known by advocates as the "Linscott Law" named after Oregonian Maj. Jeff Linscott, a Marine veteran who paid more than $100,000 of his own funds to fight creditors who challenged his Federal SCRA rights in court.

SCRA laws are supposed to keep creditors from foreclosing on loans, practicing predatory practices, or adjusting interest rates against activated military members. But, have been no teeth in the laws to prevent creditors from threatening military families from paying high court costs to enforce the law.

The Linscott Law will now allow military families to sue creditors for attorney fees and court costs, which means that they can now defend themselves against illegal actions and predator lenders. The new law may actually be duplicated by other States as well, who want protections for Servicemembers.

Last year, Jess Barton who serves as Associate Legal Counsel for OWVA and a member of the Military Assistance Panel told OWVA's directors that, "Some creditors prey on deployed military personnel, even after they hear of their federal rights for relief, because they cannot defend themselves while in Iraq or Afghanistan."

"Most lenders comply with the law, but the ones who do not are particularly aggressive, since there has been no recourse against them. Now we will fight them back in court," said Greg Warnock, OWVA's executive director, in a conversation with Linscott on Friday.

OWVA developed legislative sponsors and key support for the bill, and gave testimony about its merit to deployed families. OWVA initially added a penalty amendment that would fine violators $10,000 per incident. This would give the legislation additional "teeth" because systematic violators should be punished for their abuses over and above the fees a court may award.

"By keeping the penalty clauses out of the bill, however, we hoped to show the Judiciary Committees and the financial institution advocates that we were willing to compromise, so conforming financial institutions wouldn't feel threatened." said Jess Barton. "The penalty amendment was worth compromising to assure that the bill would be passed and federal laws will be upheld. The Linscott Law is a tremendous victory for Oregon's military families.

Jess Barton may be reached by email (jessbarton@msn.com ) for additional comments or legal advice regarding the new law.