Lawsuit settled with Michigan bank over illegal repossession of servicemembers’ cars

A Bay City, Michigan-based credit union agreed to a settlement this week stemming from a lawsuit that alleges the financial institution illegally repossessed vehicles owned by active duty servicemembers.

The agreement with COPOCO Community Credit Union was announced by the Justice Department Thursday.

According to the lawsuit, which was filed by the Department of Justice Civil Rights Division and the U.S. Attorney’s Office for the Eastern District of Michigan on July 26, 2016, the credit union violated the Servicemembers Civil Relief Act, which protects certain rights of servicemembers while on active duty.

Under the SCRA, vehicles cannot be repossessed from active duty servicemembers without a court order, provided payments and deposits were made prior to active duty status. However, on numerous occasions, COPOCO repossessed servicemembers vehicles without first verifying military status or obtaining court orders, which adversely affected servicemembers and their families.

An investigation was launched following an October 2015 complaint from Alyssa Carriveau, whose vehicle was repossessed from the driveway of her home in Lacey, Washington. Carriveau, whose husband, U.S. Army PFC Christian Carriveau, was active duty and engaged in out-of-town military training at the time, first believed the vehicle, which contained their 2-year-old daughter’s car seat, had been stolen. Carriveau later learned it had been repossessed – illegally.

As part of the agreement, COPOCO is required to change their policies and provide $10,000 in compensation, as well as lost equity and interest for each of the affected servicemembers. The bank will also be responsible for repairing the credit of affected servicemembers and pay a $5,000 civil penalty to the United States.

“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.”

Acting United States Attorney Daniel L. Lemisch said the U.S. attorney’s office in the Eastern District of Michigan is committed to protecting the financial and legal rights of servicemembers and their families.

“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,” Lemisch said.