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ARTICLE · 12 AUGUST 2022

Regulators Remind Auto Industry Of Servicemember Protections

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To this end, the SCRA places the burden on auto lenders to ensure servicemembers are protected.

United StatesConsumer Protection
Moorari K. Shah
Moorari K. Shah
A.J. Dhaliwal
A.J. Dhaliwal
Pouneh Almasi
Pouneh Almasi
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On July 29, the CFPB and DOJ issued a joint letter to the auto lending and leasing industry reminding auto companies of their obligations under the Servicemembers Civil Relief Act (SCRA). The SCRA affords special protections to servicemembers and their dependents against unfair or predatory practices by auto lenders, including:

  • Limits on vehicle repossession: during a borrower's military service, an auto lender is required to obtain a court order before attempting to repossess a financed vehicle.
  • Early lease terminations: servicemembers can opt for early termination of auto leases without penalty while in military service or receiving military order for a permanent change in station or deployment elsewhere. This includes the right to a refund of all lease amounts paid in advance

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