CitiFinancial Settlement Reached over SCRA Repossession Protection

A settlement has been reached in the amount of $907,000 to resolve claims that CitiFinancial Credit Co. violated the Servicemembers Civil Relief Act by failing to offer SCRA repossession protection to active duty servicemembers, the U.S. Department of Justice stated.

According to the claim, at least 164 automobiles were repossessed despite SCRA repossession protection that the on-duty servicemembers were granted. These vehicles were allegedly reprocessed by the successor in interest to CitiFinancial Auto Corp. during 2007 to 2010. During this time period, CitiFinancial had sold its business responsible for auto lending and servicing to accompany called Santander Consumer USA Inc.

Back in 2015, the U.S. DOJ launched an investigation into the lending practices of Santander which led to its $10.5 million settlement to compensate service members whose SCRA repossession protection was violated.

Under the recent agreement with CitiFinancial, the company will pay an additional $5,000 to each service member who was not properly given SCRA repossession protection. An additional $500 per account has been allotted to compensate borrowers for any equity that was lost. Additionally, under the settlement, CitiFinancial will be required to take action to repair the credits of servicemembers who were harmed by the repossession.

“Members of our Armed Forces make extraordinary sacrifices in order to protect and defend our nation, and they should be able to serve actively without fear that their legal rights will be violated,” a statement by Associate Atty. Gen. Rachel L. Brand read. “This settlement provides financial relief and credit repair assistance to the servicemembers whose vehicles were repossessed by CitiFinancial.”

CitiFinancial was accused of denying servicemembers the right to have a court review the status of their SCRA repossession protection by neglecting to obtain orders from the court before taking the vehicles of eligible servicemembers into repossession. Under SCRA repossession protection, the courts can take multiple actions in order to protect those in service from having their vehicles repossessed while they are actively on duty.

“The men and women who serve in the Armed Forces deserve to have us protect their backs while they selflessly protect us,” U.S. District Judge John Parker said in a statement. “This conduct clearly fell short of that and I’m grateful we were able to repair some of that harm.”

A spokesman for CitiFinancial said in a statement, “Citi values its relationship with all servicemembers and we deeply regret that we fell short of providing best-in-class service to them. We apologize for the actions that led to the settlement.”

The U.S. government is represented by Jeff Sessions, John M. Gore, Sameena Shina Maheed, Elizabeth A. Singer, Audrey M. Yap, John R. Parker and Nicole Dana of the U.S. Department of Justice.

The SCRA Repossession Protection Case is U.S. v. CitiFinancial Credit Co., Case No. 3:17-cv-02513, in the U.S. District Court for the Northern District of Texas.

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