Wells Fargo this month agreed to pay $5.4 million to U.S. servicemembers whose cars it illegally repossessed, according to the U.S. Attorney's Office in Los Angeles.

The cash, an expansion of a previous settlement, will go to 450 servicemembers, prosecutors said. The total number of people in the armed services affected by the illegal repossessions is more than 860; the total cash paid out is expected to reach more than $10.1 million, according to the office.

The repos were made in violation of the Servicemembers Civil Relief Act (SCRA), feds say. The U.S. Attorney's Office summarized how the law works: “The SCRA requires a court to review and approve any repossession if the servicemember took out the loan and made a payment before entering military service. The court may delay the repossession or require the lender to refund prior payments before repossessing.”

“The SCRA provides important protections and is intended to prevent unnecessary financial hardship for the brave women and men who serve in our armed forces,” Sandra R. Brown, acting U.S. Attorney in Los Angeles, said in a statement.

Natalie M. Brown, Wells Fargo's manager for consumer lending communications, said via email that the bank was working on righting this wrong.

“As part of our commitment to a comprehensive, ongoing account review process and as part of our consent order work, we recently identified additional auto customers who are eligible for remediation,” she said. “We are in the process of notifying and compensating those customers in keeping with our commitment to ensuring all servicemember customers have the protections and benefits available to them.”

The U.S. Attorney's Office filed a complaint in federal court over the repossessions last year. The bank, via its dealer services arm, agreed to pay $10,000 to each affected servicemember. “The men and women of our armed forces should be able to devote their full attention to their military duties, without having to worry about their cars being repossessed back home,” acting assistant Attorney General John M. Gore said in a statement.

The repo story came as Wells Fargo was coping with blowback from a scandal in which 3.5 million potentially fake bank and credit card accounts had been created by the institution, apparently in order to meet sales goals.  At least $6.1 million in refunds to customers swindled by the fake accounts have been approved. The institution also agreed to settle a $142 million class action claim.

In Los Angeles, the Committee for Better Banks has been lobbying the City Council to enact stricter rules for Wells Fargo and other financial institutions who want to do business with City Hall. The group wants the council to prohibit the city from using the banking services of institutions that have “predatory sales goals.”

Maria Loya, L.A. policy director with the Committee for Better Banks, said via email that the repo scandal highlights the organization's issues with Wells Fargo and other financial institutions.

“Just when you thought the Wells Fargo scandal couldn’t get worse, they hit a new low: illegally repossessing the cars of servicemembers who risk their lives for us every day,” she said. “But this misconduct is not limited to Wells Fargo — predatory banking tactics exist industrywide. Los Angeles residents were among those targeted the most by Wells Fargo’s fraud, and we won’t be safe until industrywide policies are put into place to ban unethical conduct at every bank.”

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