The Justice Department today announced that California Auto Finance, a subprime auto lending company based in Orange County, California, has agreed to enter into a court-enforceable consent order to resolve allegations that it illegally repossessed two servicemembers’ cars without court orders while they were on active duty. The Justice Department filed a lawsuit against California Auto Finance and a related entity called 3rd Generation Inc., on March 28, 2018, alleging that their repossession practices violated the Servicemembers Civil Relief Act (SCRA). Under the proposed consent order, which is still subject to approval by the United States District Court for the Central District of California, California Auto Finance must adopt new repossession policies, pay one servicemember $30,000, which is the highest amount ever recovered by the Department for a single servicemember in an automobile repossession case, and pay a $50,000 civil penalty to the United States.
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