On November 2, 2018, the United States Attorney for the Southern District of New York announced a settlement with a New York based credit union, resolving allegations that the credit union had illegally repossessed cars owned by servicemembers on active duty in violation of the Servicemembers Civil Relief Act, 50 U.S.C. § 3952 (“SCRA”). Under the SCRA, the credit union was prohibited from such repossessions without a court order. According to the settlement, the U.S. Attorney’s investigation revealed that the credit union had committed multiple SCRA violations and that prior to 2014 it did not have any written policies or procedures with respect to the SCRA’s protections against certain auto repossessions.
Under the agreement, the credit union has agreed to pay $65,000 to compensate seven service members whose cars it unlawfully repossessed and to pay a civil penalty of $30,000 to the United States. The credit union has also taken steps to repair the credit of affected servicemembers.
The U.S. Attorney’s investigation was spurred by two private lawsuits filed by servicemembers against the credit union.