Michigan CU settles SCRA suit for illegal repos
The Department of Justice announced 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 agreement requires COPOCO to provide $10,000 in compensation to each of three servicemembers, plus any lost equity in the vehicle with interest. Another servicemember, who had his car returned 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.