On September 30, 2021, the Department of Justice (DOJ) announced that it reached a settlement with an auto lender, resolving allegations that the lender violated the Servicemembers Civil Relief Act (SCRA).
Following an investigation which began in 2019, the DOJ filed a complaint that same day in the United States District Court for the Northern District of Texas, alleging that the lender violated SCRA by failing to grant military servicemembers’ requests to terminate their motor vehicle leases early without prepayment penalty. Under SCRA, servicemembers who receive military orders for deployment of 180 days or more, or for a permanent change of station to another location, are permitted to terminate such leases early without prepayment penalty.
Under the settlement, the lender agreed to pay $94,282.62 to compensate the ten allegedly aggrieved servicemembers as well as a $40,000 civil money penalty. The lender also agreed to update its SCRA procedures and train its staff on those updated procedures.
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