Auto Finance Company New City Funding To Reimburse Servicemembers For Violating The SCRA

Auto finance company, New City Funding will pay over $120,000 reimburse servicemembers for violating the SCRA. The DOJ alleged New City Funding illegally repossessed vehicles owned by active duty military servicemembers. By doing so, New City violated the Servicemembers Civil Relief Act.

The DOJ alleges that New City Funding repossessed at least five vehicles owned by servicemembers without obtaining the court orders.  The DOJ further allege the company failed to determine if the owners were on active duty military service prior to repossessing their cars. In some cases, New City went forward with repossessions even after they were told that the owner was on active duty.

Assistant Attorney General Harmeet K. Dhillon of the Justice Department’s Civil Rights Division said:

“By repossessing these vehicles, New City Funding disregarded the law and the duties it owed to members of our Armed Forces. We will hold accountable any business that does not respect the legal rights of U.S. servicemembers.”

U.S. Attorney Jay Clayton for the Southern District of New York also stated:

“New Yorkers support the women and men of our armed forces, and New Yorkers want our Office to stand up for the rights of our service members, particularly when they are deployed. The Servicemembers Civil Relief Act protects our troops from having their cars and other assets seized while serving, and our Office stands ready to enforce those protections.”

The Terms Of The Settlement Agreement

The terms of the settlement states that New City will pay at least $60,000 in compensation to affected servicemembers. It will also forgive any unpaid balance on their accounts and take steps to repair damage to their credit. New City will also be required to pay a $60,000 civil penalty and make changes to its policies and training.

The SCRA is a federal law that provides legal and financial protections for servicemembers and their families. The law prevents any type of lender from repossessing a servicemember’s vehicle without obtaining a court order. 

This case was handled by the US Attorney’s Civil Rights Division’s Housing and Civil Enforcement Section in Manhattan.

The DOJ has obtained over $483 million in monetary relief for over 148,000 servicemembers through its enforcement of the SCRA. For more information about the Department’s SCRA enforcement efforts, please visit www.servicemembers.gov.

Servicemembers who believe that their rights under the SCRA may have been violated should contact the nearest Armed Forces Legal Assistance Program Office. Office locations can also be found at legalassistance.law.af.mil.

Note: The Settlement Agreement can be read here.

Read More About Lenders Violating The SCRA On MFI-Miami.com.