Arkansas Federal Credit Union Class Action Settlement
We are pleased to announce the final approval of a significant class action settlement involving Arkansas Federal Credit Union (AFCU). This case, brought by class representatives Lenoria E. Haley and Walter T. Morris on behalf of a group of similarly affected individuals, addresses claims related to post-repossession practices under the Uniform Commercial Code (UCC).
Background
The class action originated when AFCU pursued collection efforts against certain consumers for deficiency balances after the repossession of financed personal property, such as vehicles. The class representatives countered with allegations that AFCU’s post-repossession notices violated Arkansas’s UCC provisions, specifically those governing how creditors must notify borrowers after repossession. These notices allegedly failed to meet the strict legal requirements, such as adequately informing borrowers of the method and details of the sale of repossessed property.The class representatives argued that this failure harmed borrowers, both by exposing them to unjustified financial liabilities and by tarnishing their credit reports.
Settlement Details
After extensive negotiations, a settlement has been reached, benefiting 607 class members. The primary terms of the settlement include:
• $2.35 Million in Debt Forgiveness: AFCU has agreed to waive approximately $2.35 million in deficiency balances that were being pursued against the class members. This means that class members no longer owe AFCU the remaining balance after their vehicles were repossessed and sold.
• Credit Report Correction: AFCU has agreed to request that major credit reporting agencies remove negative credit marks related to the repossession from the class members’ credit histories. This non-monetary relief can have a significant positive impact on individuals’ credit scores and financial health, as negative credit reports affect everything from job applications to securing housing.
• $200,000 Cash Settlement: AFCU will also pay $200,000 to cover attorney fees, litigation costs, and other related expenses.
Fairness and Approval
The court has granted final approval of the settlement, determining that it is fair, adequate, and reasonable given the facts of the case. This settlement allows class members to receive meaningful financial and credit-related relief without the uncertainty, time, and expense of further litigation.
The settlement is a victory for consumer protection, ensuring that creditors like AFCU are held accountable for compliance with UCC requirements when repossessing and selling personal property.
If you have any questions about this settlement or believe you might be entitled to relief, do not hesitate to contact our office for assistance.