Blog Enforcement Watch March 12, 2022

Credit Union Enters Into Consent Order with U.S. Attorney’s Office Over Alleged SCRA Violations

On March 11, 2022, the U.S. Attorney’s Office (USAO) for the Eastern District of Virginia filed a consent order and settlement with a Virginia-based credit union for alleged violations of the Servicemembers Civil Relief Act (SCRA). The lawsuit, filed in U.S. District Court for the Eastern District of Virginia, alleged that the defendant unlawfully charged interest rates that exceeded the maximum allowable under the SCRA.

The SCRA restricts the amount of interest that lenders can charge active-duty military servicemembers to 6%. It also requires that lenders who wish to repossess an automobile from a servicemember during military service obtain a court order prior to doing so. In the lawsuit​, the USAO alleged that the defendant violated these provisions of the SCRA when it charged servicemembers interest in excess of 6% (the cap under the SCRA) and repossessed servicemembers’ vehicles without a court order.

The settlement requires the defendant to pay $70,000 in restitution to affected servicemembers and a $40,000 civil penalty. It also enjoins the defendant from violating the SCRA–specifically, from charging interst exceeding 6% to any servicemember during their military service, from reamortizing any installment contract loans, and from repossessing any SCRA-protected vehicle without a court order.

The post Credit Union Enters Into Consent Order with U.S. Attorney’s Office Over Alleged SCRA Violations appeared first on Consumer Finance Enforcement Watch.