CU Pays For SCRA Violations
POUGHKEEPSIE, New York — The U.S. Department of Justice and the Hudson Valley Federal Credit Union announced a $95,000 settlement Friday, after an investigation into claims that the company violated federal law by repossessing service members’ vehicles while they were on active duty.
Hudson Valley Federal Credit Union will pay $65,000 to compensate seven members of the military whose vehicles the DOJ determined were repossessed in violation of the Servicemembers Credit Relief Act.
Under SCRA, active members of the military are protected from having property repossessed without a court order.
Hudson Valley Federal Credit Union, which has branches in Dutchess, Orange, Putnam and Ulster counties, will also pay a $30,000 civil penalty.
“Financial institutions must recognize and honor their responsibilities to our men and women in uniform,” Acting Assistant Attorney General John Gore said on Friday.
Six of the seven service members will receive $10,000 and compensation, with interest, for any lost equity in their vehicles. The seventh, whose vehicle was returned within 24 hours of being seized, will receive $5,000.
The credit union also agreed to take steps to repair each service member’s credit, according to DOJ.
In a lawsuit filed in the U.S. District Court for the Southern District of New York, the DOJ said it began investigating HVFCU in December 2016, after two military members filed private lawsuits over the repossession of their vehicles.
In one of the cases, a member of the Air Force claimed to have contacted HVFCU to request relief from his monthly payments before starting a six-month deployment.
He said that HVFCU repossessed the vehicle without a court order, sold it at auction and billed him $16,700 for repossession costs. A confidential settlement ended the lawsuit.
The company had no policies prior to August 2014 governing SCRA protections and to check service members’ status before repossession, DOJ said.
The company “at least twice rejected service members’ requests for SCRA protection, according to DOJ. One service member deployed to South Korea, and his girlfriend contacted HVCFU “multiple times” before his vehicle was repossessed, the DOJ said.
Overall, the DOJ accused the company of repossessing at least nine service members’ vehicles between July 3, 2008, and Feb. 19, 2014.
In a press release issued Friday, HVFCU President and CEO Mary D. Madden said the company will increase staff training on SCRA and add a link for service members to its website.
“The men and women of our military deserve our unwavering support, so when we learned of the DOJ’s inquiry in 2016, we immediately reviewed our procedures to ensure compliance with the SCRA,” Madden said.
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