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Press Release

Westlake Financial to Pay Over $225,000 to Resolve Servicemembers Civil Relief Act Claims

For Immediate Release
Office of Public Affairs

The Justice Department today announced that Westlake Financial has agreed to pay over $225,000 to resolve allegations that it violated the Servicemembers Civil Relief Act (SCRA) by failing to provide qualified servicemembers with interest rate benefits for the entire period required under the SCRA and by improperly delaying approval of interest rate benefit requests.

“The Servicemembers Civil Relief Act makes clear that those serving in our nation’s military are entitled to receive interest rate benefits as soon as they are called to service,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “This settlement sends the message that we will hold companies accountable when they deny servicemembers the important interest rate benefits they are entitled to under federal civil rights law.”

“Servicemembers make enormous sacrifices, and we have a responsibility to protect their rights and ensure they have full access to important benefits guaranteed under the law,” said U.S. Attorney Martin Estrada for the Central District of California. “The settlement with Westlake Financial reflects the Justice Department’s firm commitment to protecting the rights of servicemembers – and to defending civil rights for everyone.”

The SCRA provides that interest on any debt incurred by a servicemember before entering military service is limited to six percent per year. In order to take advantage of the interest rate cap, a servicemember must provide the creditor with written notice and a copy of their military orders or other documentation of their military service no later than 180 days after leaving service. After receiving notice, a creditor must forgive any interest in excess of 6% retroactively back to the date orders are issued calling the servicemember to active duty.

Westlake Financial is a Los Angeles-based auto finance company that specializes in subprime and near-subprime loans. In 2017, the Justice Department filed a complaint in the U.S. District Court for the Central District of California alleging that Westlake and its subsidiary, Wilshire Commercial Capital, violated the SCRA by unlawfully repossessing at least 70 vehicles owned by SCRA-protected servicemembers. In order to resolve those allegations, Westlake entered into a settlement requiring the company to pay over $700,000 to servicemembers and a $60,788 civil penalty and to be subject to monitoring by the department.

While monitoring Westlake’s compliance with the SCRA, the Justice Department discovered problems with the company’s handling of interest rate benefit requests. The department determined that Westlake was failing to apply interest rate benefits back to the date orders were issued calling the servicemember to active duty. The department also determined that Westlake had improperly delayed the approval of interest rate benefits to some servicemembers.

Under the amended settlement agreement, Westlake has agreed to pay an additional $185,460 to 250 servicemembers who did not receive interest rate benefits back to the date their orders were issued or who had to wait more than 60 days to receive their benefits. Each servicemember who did not receive interest rate benefits back to the date their orders were issued will receive a refund of any excess interest they paid, as well as an additional payment of three times the overpayment or $100, whichever is higher. Servicemembers whose interest rate approvals were delayed more than 60 days will each receive $500. Westlake will also be required to pay an additional $40,000 civil penalty to the United States. The amended agreement also requires Westlake to revise its SCRA policies and procedures and training to ensure that interest rate benefits are timely and appropriately applied to servicemember accounts.

This case was handled by the Civil Rights Division’s Housing and Civil Enforcement Section and the U.S. Attorney’s Office for the Central District of California. Since 2011, the Justice Department has obtained over $476 million in monetary relief for over 121,000 servicemembers through its enforcement of the SCRA. For more information about the department’s SCRA enforcement efforts, please visit

Servicemembers and their dependents who believe that their rights under the SCRA have been violated should contact the nearest Armed Forces Legal Assistance Program Office. Office locations may be found at

Updated September 28, 2022

Civil Rights
Press Release Number: 22-1029