A subprime auto lender based in the city of Orange agreed Wednesday to an $80,000 settlement of a federal lawsuit alleging the company illegally repossessed the vehicles of two servicemembers without court orders while they were on active duty.

The Justice Department sued California Auto Finance and a related entity called 3rd Generation Inc. last March, alleging violation of federal laws protecting servicemembers from losing their cars.

If U.S. District Judge James Selna approves the court-enforceable consent order as expected, U.S. Army Specialist Omar Martinez will receive $30,000 — the highest amount ever recovered by federal prosecutors under the Servicemembers Civil Relief Act.

The company’s attorneys did not immediately respond to a request for comment on the consent order, under which California Auto Finance agreed to pay a $50,000 civil penalty to the federal government and must adopt new repossession policies.

Martinez told the company he would have limited ability to communicate while in basic training, but his car was repossessed anyway during his first month in the service, according to the U.S. Attorney’s Office.

His credit took a hit and he had to depend on taxis to buy groceries and run other errands while he served at Fort Benning, Georgia, before being deployed to Afghanistan, where he served until November, according to prosecutors, who said the company has also agreed to help repair Martinez’s credit.

“This case sends a message to financial institutions, large and small, that they must live up to their obligations to our servicemembers,” said Assistant Attorney General Eric Dreiband for the Justice Department’s Civil Rights Division.

“We will continue to vigorously pursue lenders who fail to take the simple steps necessary to determine, before repossessing a car, whether it belongs to a servicemember,” he said. “Servicemembers who are going through basic training or another kind of military service should not have to worry that their cars will be repossessed with no court supervision during their time of service to our country.”

The Justice Department began investigating California Auto Finance after receiving a complaint in November 2016 from U.S. Army Pvt. Andrea Starks, who said she notified the lender in April of that year that she would be entering the military the following month.

Despite the advance notice, California Auto Finance repossessed Starks’ vehicle — which was parked at her grandmother’s home in Cedar Rapids, Iowa — without a court order on May 9, 2016, her first day of military training duty at Fort Leonard Wood, Missouri, according to the government.

The Justice Department’s investigation corroborated Starks’ complaint, found that California Auto Finance had no policies related to SCRA compliance, and revealed that the lender had also violated Martinez’s SCRA rights.

Starks reached a private settlement with California Auto Finance before the proposed consent order was filed.

For more information about the Justice Department’s SCRA enforcement, visit www.servicemembers.gov.

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