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A class action lawsuit investigation has recently been launched into financial institutions for allegedly not giving proper SCRA interest rate reductions to active military service members.
Military service members who may have been taken advantage of during their active duty, may be able to file legal action against these financial institutions for allegedly not performing adequate SCRA interest rate reduction.
The Department of Justice has been taking steps to enforce this and other requirements under the Servicemembers Civil Relief Act, or SCRA. It recently reached a third consecutive SCRA settlement in just 13 months.
The DOJ reached the agreement with finance company Westlake Financial Services for allegedly violating the SCRA in regards to servicemembers’ vehicle repossessions.
The SCRA was passed by Congress to improve financial stability for active military service members. The SCRA guarantees a number of benefits for service members, including SCRA interest rate reduction to 6%. Financial institutions are supposed to reduce the interest rate on servicemembers’ debt from the day the servicemember is called into active duty and during the entirety of their active duty period.
Overview of SCRA Settlement
Along with its subsidiary, Wilshire Consumer Capital, Westlake has agreed to pay $760,788 to the SCRA settlement. This SCRA settlement will resolve numerous allegations of various federal violations, including unlawfully repossessing cars of 70 active duty servicemembers.
These alleged vehicle repossessions occurred without court orders, with Westlake and Wilshire allegedly failing to confirm that their policies were SCRA compliant. Officials stated the settlement will require the financial institutions to pay $10,000 in compensation to the 70 servicemembers, along with any interest and lost equity in the vehicle’s value.
The SCRA settlement agreement also states Westlake and Wilshire must restore the credit of all affected servicemembers and pay a $60,788 civil penalty to the federal government. Furthermore, Westlake and Wilshire must also update their policies to be able to properly determine if a vehicle repossession affects an SCRA protected servicemember.
If the vehicle being repossessed is that of an active duty servicemember, a court order must be obtained before the vehicle is seized. The settlement also promises that all eligible servicemembers will receive a proper SCRA interest rate reduction.
Westlake and Wilshire will contact affected servicemembers to notify them of their upcoming compensation, with the parties agreeing to the settlement terms of the SCRA lawsuit once the settlement amount and civil penalties are paid.
Attorneys involved in the SCRA lawsuit are happy with the outcome and hope it will encourage other potential claimants who allegedly did not receive their SCRA interest rate reduction to come forward.
“The members of our armed forces should be able to devote their full attention to their duties without having to worry about whether their legal rights will be violated by creditors. We honor all service members for their sacrifice and service to our nation, and this settlement signals our ongoing commitment to protecting the rights of our men and women in uniform,” said acting Assistant Attorney General John Gore.
Join a Free Military Interest Rate Class Action Lawsuit Investigation
If you are a member of the military and you were overcharged (or think you may have been) for interest rates above 6 percent while on active duty, or your bank or credit card tried to collect on interest owed after you returned from active duty, you may qualify to file a SCRA interest rate lawsuit or class action lawsuit. Other predatory financial practices that may have exploited your military status may also qualify you to bring a legal claim.
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One thought on Are Creditors Ignoring the SCRA Interest Rate Reduction for Servicemembers?
This is great that they are finally starting to look at the way service members have been taken advantage of, but the SCRA covers only those service members who get into a mortgage or buy an automobile BEFORE they are called to Active-Duty. What about those of us who were already serving, bought a home and was taken advantage of by a bank and then the housing market bubble burst, causing foreclosure and bankruptcy, and banks who gave inflated interest rates on pre-owned vehicles based on the foreclosure/bankruptcy? Our family has gone through hell the past ten years because of this, while my husband deployed to Iraq and Afghanistan numerous times, ruining his health.