United States Attorney for the Southern District of New York, Jay Clayton, and Assistant Attorney General for Civil Rights for the United States Department of Justice, Harmeet K. Dhillon, announced that New City Funding Corp. has agreed to pay at least $120,000 to resolve allegations it violated the Servicemembers Civil Relief Act (SCRA). The company was accused of repossessing vehicles owned by servicemembers protected under the SCRA without first obtaining required court orders.
Under the agreement, New City will pay $60,000 to compensate four servicemembers whose cars were unlawfully repossessed and an additional $60,000 as a civil penalty to the United States. The company has also agreed to provide information on other repossessions and will compensate any additional servicemembers found to have been affected.
The investigation into New City’s practices began after a private lawsuit was filed in the Southern District of New York. The plaintiff alleged that their vehicle was repossessed after entering military service in violation of SCRA protections. Further investigation revealed four more violations and indicated that New City often did not follow its own policies regarding non-judicial auto repossessions involving servicemembers.
New City Funding Corp., based in Stony Point, New York, offers auto financing primarily to individuals who may not qualify for loans from traditional lenders.
“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. “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.”
“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.”
According to terms outlined in the agreement, each identified affected servicemember will receive $15,000 plus lost equity with interest for their vehicle. Similar compensation will be provided if more cases are identified. Additionally, steps will be taken by New City to repair credit records impacted by these actions; payments will be distributed at no cost to recipients.
Enforcement efforts regarding SCRA are led by both the Civil Rights Division’s Housing and Civil Enforcement Section as well as U.S. Attorney’s Offices nationwide. Information about enforcement is available at www.servicemembers.gov.
Servicemembers or dependents who believe their rights under SCRA have been violated can contact their nearest Armed Forces Legal Assistance Program Office; locations can be found at legalassistance.law.af.mil.
This case is being managed by Assistant U.S. Attorney Dana Walsh Kumar from the U.S. Attorney’s Office and Trial Attorney Audrey M. Yap from the Civil Rights Division.
