Attention buy-here, pay-here dealerships with related finance companies as well as lease-here, pay-here operators.

If your book of business contains individuals who are actively serving in the military, a stern letter from the Department of Justice and the Consumer Financial Protection Bureau (CFPB) is directed at you.

The federal agencies issued a joint letter last week reminding auto finance companies of their responsibilities to recognize important legal protections for military families under the Servicemembers Civil Relief Act (SCRA).

While servicemembers have the same rights as non-military borrowers, officials reiterated the SCRA provides additional rights to protect servicemembers and their families against unique financial challenges.

Officials explained the letter was designed to ensure that auto finance companies are aware of key provisions within the SCRA, including:

—Wrongful vehicle repossessions: The SCRA prohibits an auto finance company from repossessing a vehicle during the borrower’s military service without a court order, even if the borrower financed or leased the vehicle prior to entering military service.

—Failure to terminate vehicle leases without penalty: The SCRA allows servicemembers to terminate motor vehicle leases early and without penalty after entering military service or receiving qualifying military orders for a permanent change of station or deployment.

—Violations of auto finance interest rate benefits: The SCRA also limits interest rates on contracts incurred prior to military service to no more than 6% per year, including most fees. If servicemembers make a proper request, a creditor must forgive and not defer any interest greater than 6%.

The CFPB said its recent research has shown that servicemembers tend to carry more auto finance debt at younger ages than their civilian counterparts, largely due to the need for transportation while living on a military base.

“Auto finance companies that play by the rules should not be disadvantaged by competitors that violate the legal rights of military families,” CFPB director Rohit Chopra said in a news release. “The CFPB is closely monitoring the auto finance industry to ensure that servicemembers and their families are being treated fairly.”

Assistant attorney general Kristen Clarke added, “The Civil Rights Division is entrusted with the responsibility of ensuring that the rights of the brave men and women of our nation’s armed forces are safeguarded from discrimination and unfair treatment.

“We work every day to ensure that these rights, including those related to auto financing, are protected through litigation, outreach, and policy development,” Clarke went on to say.

The entire letter can be viewed online here.