Federal prosecutors obtain $5.4 Million in settlement with bank over military members' cars

Posted at 2:39 PM, Nov 14, 2017
and last updated 2017-11-14 17:39:15-05

LOS ANGELES (CNS) - The U.S. Justice Department in Los Angeles announced today that it has obtained an additional $5.4 million for servicemembers whose vehicles were repossessed by Wells Fargo Bank in violation of federal law.

Wells Fargo reached a $4 million settlement with federal prosecutors last year over allegations it illegally repossessed more than 400 cars owned by members of the military without a court order.

The settlement resolves alleged violations of the Servicemembers Civil Relief Act, which protects service members against certain civil proceedings that could affect their legal rights while they are in the service.

The additional amount brings the total compensation under the settlement to more than $10.1 million and the total number of servicemembers eligible for relief to more than 860.

"The SCRA provides important protections and is intended to prevent unnecessary financial hardship for the brave women and men who serve in our armed forces," said acting U.S. Attorney Sandra R. Brown.

"Losing an automobile through an unlawful repossession while serving our country is a problem servicemembers should not have to confront. We are pleased that Wells Fargo is taking action to compensate these additional servicemembers as required under the settlement with the Justice Department."

The settlement covers repossessions that occurred between Jan. 1, 2008, and July 1, 2015. The agreement requires Wells Fargo to pay $10,000 to each of the affected military members, plus any lost equity in the vehicle with interest.

Wells Fargo also must repair the credit of all affected soldiers.

The agreement also requires Wells Fargo to pay a $60,000 civil penalty to the United States and to determine, in the future, if any vehicle it is planning to repossess is owned by an active duty service member.