Jay Clayton, U.S. Attorney for the Southern District of New York | Department of Justice
United States Attorney for the Southern District of New York, Jay Clayton, and Assistant Attorney General for Civil Rights for the United States Department of Justice, Harmeet K. Dhillon, announced that New City Funding Corp. has agreed to pay at least $120,000 to settle claims that it violated the Servicemembers Civil Relief Act (SCRA) by repossessing vehicles owned by servicemembers without obtaining required court orders.
Under the settlement, New City will pay $60,000 to compensate four servicemembers whose cars were unlawfully repossessed and an additional $60,000 as a civil penalty to the United States. The company also agreed to provide information about other repossessions and compensate any additional servicemembers affected by similar violations.
The investigation into New City's practices began after a private lawsuit was filed in the Southern District of New York. The plaintiff alleged that their vehicle was repossessed after entering military service in violation of SCRA protections. Further inquiry identified four more violations and revealed that New City did not consistently follow its written policies regarding non-judicial auto repossessions under SCRA.
New City Funding Corp., based in Stony Point, New York, offers auto financing primarily to individuals who may not qualify for loans from traditional lenders.
“New Yorkers support the women and men of our armed forces, and New Yorkers want our Office to stand up for the rights of our service members, particularly when they are deployed,” said U.S. Attorney Jay Clayton. “The Servicemembers Civil Relief Act protects our troops from having their cars and other assets seized while serving, and our Office stands ready to enforce those protections.”
“By repossessing these vehicles, New City Funding disregarded the law and the duties it owed to members of our Armed Forces,” said Assistant Attorney General Harmeet K. Dhillon of the Justice Department’s Civil Rights Division. “We will hold accountable any business that does not respect the legal rights of U.S. servicemembers.”
According to terms outlined in the agreement, each identified servicemember will receive $15,000 plus any lost equity in their vehicle with interest; similar compensation will be provided if more cases are found. The company is also required to help repair affected servicemembers’ credit records and will reach out directly with no cost attached.
Enforcement actions related to SCRA are managed by both the Civil Rights Division’s Housing and Civil Enforcement Section as well as U.S. Attorney’s Offices across the country. More details about SCRA enforcement can be found at www.servicemembers.gov.
Servicemembers or dependents who believe their rights under SCRA have been violated can contact their nearest Armed Forces Legal Assistance Program Office; locations are listed at legalassistance.law.af.mil.
This case is overseen by Assistant U.S. Attorney Dana Walsh Kumar from the U.S. Attorney’s Office’s Civil Rights Unit in partnership with Trial Attorney Audrey M. Yap from the Civil Rights Division.
