The Justice Department today announced that New City Funding, a New York-based auto finance company, will pay over $120,000 to resolve allegations that it violated the Servicemembers Civil Relief Act (SCRA) by illegally repossessing vehicles owned by military servicemembers.
The Department alleges that New City Funding, a regional auto finance company based in Stony Point, New York, repossessed at least five vehicles owned by servicemembers without obtaining the court orders required by federal law.
The Department further alleges that New City took no steps to determine whether the owners of these vehicles were in military service prior to repossessing their cars, and in some cases, proceeded with repossessions even after being informed that the owner was on active duty.
“By repossessing these vehicles, New City Funding disregarded the law and the duties it owed to members of our Armed Forces,” said Assistant Attorney General Harmeet K. Dhillon of the Justice Department’s Civil Rights Division. “We will hold accountable any business that does not respect the legal rights of U.S. servicemembers.”
“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,” said U.S. Attorney Jay Clayton for the Southern District of New York. “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.”
Under the terms of the settlement, New City will pay at least $60,000 in compensation to affected servicemembers, 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 to avoid future violations.
The SCRA is a federal law that provides legal and financial protections for servicemembers and their families.
The law prevents an auto finance or leasing company from repossessing a servicemember’s vehicle without first obtaining a court order, as long as the servicemember made at least one payment on the vehicle before entering military service.
