On March 6, the U.S. Department of Justice (DOJ) announced that it had entered into a consent order with a California-based subprime auto lender and its affiliate. The order brings an end to a lawsuit filed by the DOJ in March 2018, previously covered by Enforcement Watch, alleging that the lender’s repossession practices violated the Servicemembers Civil Relief Act (SCRA).
Specifically, DOJ’s lawsuit alleged that the lender repossessed servicemembers’ vehicles during active military service without first obtaining a court order as required under SCRA. According to the consent order, defendants provided DOJ with a list of all repossessions they made between December 2011 and December 2018. From this list, DOJ concluded that the defendants conducted two motor vehicle repossessions that violated the SCRA. The defendants previously reached a private settlement with one of the affected servicemembers, and agreed in the consent order to pay the second affected servicemember $30,000 in compensation.
The consent order also requires the defendants to pay a $50,000 civil penalty to the United States and provide SCRA training to all employees involved in motor vehicle loan servicing or repossession.