BMW Financial Services received a request for information from the U.S. Justice Department regarding the company’s leasing compliance, under the Servicemembers Civil Relief Act (SCRA), according to documents obtained by Bloomberg.
The Justice Department sought the information in August and BMW doesn’t know how many leases could be affected by the law — which provides various protections to military servicemembers when they fall behind and become delinquent on a car payment — according to the report. The leases are tied to a $1 billion bond transaction being marketed to investors this week.
BMW Financial Services did not respond to AFN’s request for comment by press time, but the documents state that the company is cooperating with the DOJ.
Wells Fargo Dealer Services faced an investigation from the DOJ and Comptroller of the Currency over similar issues. The agencies’ investigation revealed that the bank had illegally repossessed the vehicles of 413 service members between 2008 and 2015. In late September 2016, Wells was fine $24 million by federal regulators. The company also agreed to pay a $4.1 million settlement that served as $10,000 payments to the affected servicemembers.
In 2015, Santander Consumer USA Inc. agreed to pay $9.35 million to settle allegations that it improperly repossessed more than 1,000 vehicles from military members.
Repossessions in general have been under regulatory scrutiny lately as Westlake Financial Services, Credit Acceptance Corp. and DriveTime Automotive Group Inc. were all been tapped by the Federal Trade Commission at the end of last year to provide information on their use of kill switches.