New City Funding SCRA Settlement: $15,000 per Repossession

What happened

On September 29, 2025 the Justice Department announced that New City Funding Corp., which its release describes as a regional auto finance company based in Stony Point, New York, would pay over $120,000 to resolve allegations that it repossessed servicemembers' vehicles without court orders. DOJ's case page links a single document, the settlement agreement, and no complaint. New City's counsel signed it on September 25, 2025, and the government's last signature, from the Southern District of New York, is dated September 29; it took effect on the last signature and runs four years (agreement paragraphs 4 and 35).

The agreement states the allegation: that New City repossessed, without court orders, the vehicles of at least five servicemembers who had been called to active service. As consideration, the United States agreed not to pursue claims over the alleged repossessions from June 16, 2018 through at least August 18, 2023 (paragraphs 2 and 5). DOJ's release further alleges that New City took no steps to find out whether owners were in military service before repossessing, and in some cases went ahead after being told the owner was on active duty. The agreement was reached without the taking of proof and is not an admission by either side (paragraph 3).

The review did not stop at the five. Within 30 days New City had to give the United States a spreadsheet of all its repossessions from August 19, 2023 to the effective date, with each borrower's and co-borrower's name and Social Security number, for the United States to run through the Defense Manpower Data Center. If New City objects to any additional violation the United States lists, it gets 30 days to produce evidence of compliance, after which the United States decides finally which repossessions count (paragraph 16). If New City goes to court for a repossession order, its affidavit must comply with Section 3931 (paragraph 7(d)).

The law behind this: 50 U.S.C. § 3952

Protection under installment contracts for purchase or lease: read the statute , or read § 3952 in plain English, with its enforcement record .

By repossessing these vehicles, New City Funding disregarded the law and the duties it owed to members of our Armed Forces.

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.

Who was covered

Four aggrieved servicemembers the United States identified on a list of repossessions it gave New City (agreement paragraph 15), plus anyone whose repossession the United States finally determines was a violation after reviewing New City's list of repossessions from August 19, 2023 to the agreement's effective date (paragraph 16). Co-owners share the lost equity portion (paragraph 20). The declaration form covers a borrower who was on a covered period of military service on the repossession date, or a Reserve or National Guard member who had received orders to report (Exhibit C).

What the settlement paid

• $60,000 into interest-bearing escrow within 14 days, earmarked for the four, with New City required to add whatever more the payments need (agreement paragraph 15). DOJ's release describes this as at least $60,000 in compensation.
• For each repossession identified as a violation: $15,000, all of it to the servicemember named on the note or lease, plus lost equity computed from the NADA Guide retail figure for the vehicle when repossessed and 28 U.S.C. § 1961 interest on it until payment, both shared equally by the co-owners (paragraphs 17 and 20). New City has 21 days after it receives a signed declaration or release to mail the check. It may not set off debts the recipient owes or refuse payment because of an earlier release, arbitration agreement or loan modification (paragraphs 22 and 24).
• A $60,000 civil penalty within 30 days (paragraph 26). New City must ask every credit bureau it reports to to delete the trade lines, may not pursue further payment on the accounts, must indemnify the borrowers against third parties acting for it, and must refund any deficiency they paid (paragraph 27). Money not distributed during the term goes to the Treasury (paragraph 23).
• SCRA policies the agreement requires: New City reviews any military information the borrower gave and searches the DMDC three times, in the two business days before a vehicle is referred for repossession, in the two business days after the repossession, and in the two business days before a sale. If either source shows SCRA protection, there is no referral or repossession without a court order or a signed Exhibit A waiver (paragraph 7).

Why this case matters

Read the waiver form before you sign it. This agreement lets New City seek a waiver of the court order, but only on its Exhibit A form, and that form is a partial trade: New City waives storage costs, attorneys' fees and its other repossession and sale costs and will try to return personal property, while the form warns that you may still owe the deficiency balance, plus accrued interest, if the car sells for less than the loan. Without a waiver, Section 3952(c) lets the judge order all or part of your earlier payments refunded as a condition of the repossession, pause the case, or make another equitable disposition.