In a move to protect the rights of U.S. servicemembers, the Justice Department has announced that New City Funding, an auto finance company based in Stony Point, New York, will pay more than $120,000 to resolve allegations that it violated federal law by repossessing vehicles owned by military personnel without proper authorization.
The case shines a spotlight on the protections servicemembers have under the Servicemembers Civil Relief Act (SCRA), which safeguards active-duty military members from financial and legal actions that could jeopardize their stability while serving.
Allegations Against New City Funding
The Department claims that New City Funding repossessed at least five vehicles owned by active-duty servicemembers without first obtaining the required court orders.
In some cases, the company allegedly failed to check whether the vehicle owners were in military service before proceeding with the repossessions.
Shockingly, there are reports that repossessions continued even after the company was informed that the owners were on active duty.
These actions, the Justice Department argues, disregarded both the law and the rights of the service members.
Justice Department Speaks Out
Assistant Attorney General Harmeet K. Dhillon of the 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 added,
“New Yorkers support the women and men of our armed forces, and we stand ready to enforce protections for our troops, especially when they are deployed.
The Servicemembers Civil Relief Act ensures that their vehicles and assets are protected while serving, and we are committed to upholding those rights.”
Terms of the Settlement
Under the settlement, New City Funding will:
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Pay at least $60,000 in compensation to affected servicemembers
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Forgive any unpaid balances on their accounts
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Take steps to repair any damage to their credit
Additionally, the company will pay a $60,000 civil penalty and implement changes to its policies and employee training to prevent future violations of the SCRA.
Understanding the Servicemembers Civil Relief Act
The SCRA is a federal law designed to protect military members and their families from financial and legal hardships while on active duty.
One key provision prevents auto finance or leasing companies from repossessing vehicles without a court order if the servicemember has made at least one payment on the vehicle before entering military service.
A Longstanding Commitment to Military Rights
This case was handled by the Civil Rights Division’s Housing and Civil Enforcement Section alongside the U.S. Attorney’s Office for the Southern District of New York.
Since 2011, the Justice Department has secured over $483 million in relief for more than 148,000 servicemembers through enforcement of the SCRA.
For more information on these efforts, visit www.servicemembers.gov.
What Servicemembers Should Do
Military members or their families who believe their rights under the SCRA have been violated can contact their nearest Armed Forces Legal Assistance Program Office.
Locations and contact details are available at legalassistance.law.af.mil.
The official Settlement Agreement with New City Funding can also be accessed online for full details.