WASHINGTON, DC – The U.S. Department of Justice announced today that New City Funding, a regional auto finance company based in Stony Point, New York, will pay over $120,000 to resolve allegations it violated the Servicemembers Civil Relief Act (SCRA) by repossessing vehicles owned by active-duty military personnel without the required court orders.
According to the Department, New City Funding repossessed at least five vehicles from servicemembers without first determining their military status, as mandated under federal law. In some instances, the company allegedly proceeded with repossessions even after being informed that the vehicle owners were 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 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,” added U.S. Attorney Jay Clayton for the Southern District of New York.
Under the settlement terms, New City will:
- Pay at least $60,000 in compensation to affected servicemembers
- Forgive any unpaid loan balances on the affected accounts
- Take steps to repair damage to servicemembers’ credit
- Pay a $60,000 civil penalty
- Implement policy and training reforms to prevent future violations
The SCRA prohibits repossession of a vehicle without a court order if a servicemember made at least one payment before entering military service.
The case was handled by the Civil Rights Division’s Housing and Civil Enforcement Section and the U.S. Attorney’s Office for the Southern District of New York. Since 2011, the DOJ has secured over $483 million in relief for more than 148,000 servicemembers through SCRA enforcement.
More information is available at www.servicemembers.gov. Servicemembers seeking assistance should contact their nearest Armed Forces Legal Assistance Program Office. Office locations can be found at legalassistance.law.af.mil.
