The Justice Department announced today that COPOCO Community Credit Union, based in Bay City, Michigan, has agreed to a settlement to resolve allegations that it illegally repossessed four servicemembers’ vehicles. The department’s lawsuit, filed July 26, 2016, alleged that COPOCO violated the Servicemembers Civil Relief Act (SCRA) by repossessing cars owned by protected servicemembers without first obtaining the required court orders. Under the agreement, COPOCO must change its policies and compensate four servicemembers whose cars COPOCO unlawfully repossessed.
The department launched an investigation after it received a complaint in October 2015 from Alyssa Carriveau, the wife of U.S. Army Private First Class Christian Carriveau, alleging that COPOCO had repossessed their car, along with their two-year-old daughter’s car seat, out of their driveway in Lacey, Washington, near Joint Base Lewis-McChord. Alyssa Carriveau initially believed that the car had been stolen, but she subsequently learned that it had been repossessed. Private First Class Carriveau was away at military training at the time and Alyssa Carriveau was not able to get to work without the vehicle. The department’s subsequent investigation corroborated the Carriveaus’ complaint and revealed that COPOCO had no policies related to compliance with the SCRA. After filing the lawsuit, the United States learned of three additional repossessions COPOCO conducted that violated the SCRA.
“This sends a message to financial institutions, large and small, that they must live up to their obligations to our servicemembers,” said Acting Assistant Attorney General Thomas Wheeler. “They cannot use ignorance of the law as an excuse and must instead actively ensure that they comply with the law. The Justice Department is committed to vigorously protecting the rights of the men and women who bravely serve our country.”
“The U.S. Attorney’s Office in the Eastern District of Michigan is committed to safeguarding the financial and legal rights of our servicemembers and their families,” said Acting United States Attorney Daniel L. Lemisch. “Of the many sacrifices made by our military members while they are in service to our country, losing their cars to repossession should never be one of them.”
The SCRA protects servicemembers against certain civil proceedings that could affect their legal rights while they are in military service. It requires a court to review and approve any repossession if the servicemember took out the loan and made a payment before entering military service. The court may delay the repossession or require the lender to refund prior payments before repossessing. The court may also appoint an attorney to represent the servicemember, require the lender to post a bond with the court and issue any other orders it deems necessary to protect the servicemember. By failing to obtain court orders before repossessing motor vehicles owned by protected servicemembers, COPOCO prevented servicemembers from obtaining a court’s review of whether their repossessions should be delayed or adjusted to account for their military service.
The agreement requires COPOCO to provide $10,000 in compensation to each of the affected servicemembers, plus any lost equity in the vehicle with interest. The Carriveaus, who had their car returned to them the day after the repossession at the department’s request, will receive $7,500. COPOCO also must repair the credit of all affected servicemembers, pay a $5,000 civil penalty to the United States and determine, in the future, whether any vehicle it is planning to repossess is owned by an active duty servicemember. If so, COPOCO will not repossess the vehicle without first obtaining a court order or valid waiver of SCRA rights. The agreement also contains provisions ensuring that all eligible servicemembers will receive the benefit of the SCRA’s six percent interest rate cap on their auto loans.
The department’s enforcement of the SCRA and other fair lending laws is conducted by the Civil Rights Division’s Housing and Civil Enforcement Section. Since 2011, the division has provided over $450 million in monetary relief to over 117,000 servicemembers through its enforcement of the SCRA. The SCRA provides protections for active duty servicemembers in areas such as evictions, rental agreements, security deposits, prepaid rent, civil judicial proceedings, installment contracts, credit card interest rates, mortgage interest rates, mortgage foreclosures, automobile leases, life insurance, health insurance and income tax payments. For more information about the department’s SCRA enforcement, please visit www.servicemembers.gov.
Servicemembers and their dependents who believe that their rights under SCRA have been violated should contact the nearest Armed Forces Legal Assistance Program Office. Office locations may be found at legalassistance.law.af.mil/content/locator.php.