United Auto Credit Violations of Military Lending Act Class Action

Congress passed the Military Lending Act (MLA) to protect members of the US military who require loans of various kinds. However, the complaint for this class action claims that United Car Sales Company, LLC, which does business as United Auto Credit Corporation, lends money to military members without complying with the law’s requirements.

Plaintiff Jerry Davidson is an active duty Aviation Operations Supervisor. His wife, Rebecca Ollison, is on active duty in the US Army.

In October 2018, Davidson went to buy a vehicle at a dealership near the place in Virginia where he’s stationed. To pay for the vehicle, he signed a standard form Installment Contract with United. A copy of this contract was attached to the complaint as Exhibit A.

The loan was for the value of the vehicle plus a document preparation fee, a processing fee, and a GAP fee. The complaint says, “Vehicle loans to military members are subject to the MLA under ‘consumer credit’ if the creditor finances an amount greater than the cost of the vehicle and greater than costs related to the vehicle.” Thus, the complaint claims, United should have obeyed the provisions of the MLA.

Davidson’s Installment Contract failed to comply with the MLA in other ways as well, the complaint says: The Installment Contract requires that he submit to arbitration and waive certain rights, things also forbidden by the law. United also did not provide proper financing disclosures required by the law.

The Installment Contract “misstates the Military Annual Percentage Rate (MAPR) as well as the interest rate…” According to the complaint, these things are both violations of the MLA.

How would United know that Davidson was an active duty member of the military? Under the law, United had the duty to inquire about this; and the complaint says it could have done so through the use of a database created for this purpose.

What does the law say about such violations? According to the complaint, “The MLA’s ‘Penalties and Remedies’ provides that a violation of the MLA renders the contract void from inception.”

Two classes have been defined for this action:

  • The Arbitration Clause Class is all covered borrowers in the US as defined by the MLA who entered into an Installment Contract in substantially the same form as Exhibit A which contains an arbitration provision in substantially the same form as Exhibit A.
  • The MILA TILA Disclosure Class is all covered borrowers in the US as defined by the MLA who entered into an Installment Contract in substantially the same form as Exhibit A, where amounts financed above the vehicle cost for document preparation, processing, or GAP coverage contains a MAPR disclosure that does not include all MAPR costs for financing, thereby underdisclosing the MAPR.
Article Type: Lawsuit
Topic: Military

Most Recent Case Event

United Auto Credit Violations of Military Lending Act Complaint

April 1, 2020

Congress passed the Military Lending Act (MLA) to protect members of the US military who require loans of various kinds. However, the complaint for this class action claims that United Car Sales Company, LLC, which does business as United Auto Credit Corporation, lends money to military members without complying with the law’s requirements.

United Auto Credit Violations of Military Lending Act Complaint

Case Event History

United Auto Credit Violations of Military Lending Act Complaint

April 1, 2020

Congress passed the Military Lending Act (MLA) to protect members of the US military who require loans of various kinds. However, the complaint for this class action claims that United Car Sales Company, LLC, which does business as United Auto Credit Corporation, lends money to military members without complying with the law’s requirements.

United Auto Credit Violations of Military Lending Act Complaint
Tags: Military Lending Act, Military Service Members and/or Veterans, Misrepresenting Terms of Loan