Automotive Finance Experts Comment on Improper Seizure of Vehicles by Police

Case Overview

This internal affairs case involved a class action suit involving a large city police department’s handling and seizing of automobiles associated with drug use-related offenses. The City allegedly had a policy, custom, and practice of circumventing the established codes and legal regulations of the city for the purpose of permanently parting registered owners from lien-encumbered vehicles impounded for drug related offenses without due process. The City allegedly coerced auto finance companies to terminate the terms of their liens and irreversibly repossess vehicles without notice to the registered owners by threatening a loss of indemnity if the cars are seized in conjunction with a future offense. Because of this implied threat, the auto finance companies take possession of the vehicles and then re-sell them.

Questions to the Business expert and their responses

Please describe your experience in the auto finance industry.

I have 34 years of experience in the auto finance industry as a consultant for more than 200 participants, including virtually every major auto finance company. I have managed the Association that represents all the major captive finance companies for 23 years. I have written the only two major treatises on auto financing published in the last 30 years, and I have had more than a dozen subprime finance companies as clients for which repossession issues are critical to their survival.

Do you have any specific experience relating to repossession? Please explain.

I've worked with a repossession company and a collection company in various contexts. A few years ago, I was an expert in a repossession case on a different issue.

Have you ever experienced or heard of government entities pressuring auto financers into terminating their liens on seized vehicles?

I don't recall hearing of this alleged practice; I believe it is highly unusual. As Managing Director of an automobile leasing association, I have exposure to this city's activities. The city is one of the most difficult cities to deal with; they bend or change the rules as they go in a variety of ways. For example, they may accelerate the sales tax of lessees who are moving in while not crediting the sales tax of lessees who are moving out. Other jurisdictions are much more careful to follow their mandates.

About the expert

This seasoned expert specializes in auto finance and lease regulatory compliance, with over 30 years of experience in the consumer vehicle leasing and financing areas. He regularly consults as an expert witness on auto leasing and finance-related matters, including dealer finance practices, insurance sale practices, and Regulation Z & M issues. In addition, he has consulted for the Federal Reserve Board and National Credit Union Administration on leasing and lending regulatory issues. The expert is the Managing Director of a trade association for major retail automobile lessors, and he also runs a private consulting business. He has been cited in numerous publications and occasionally appears on television as a representative of the industry. The expert earned his B.S. from Yale University and has a J.D. from the University of California, Berkeley School of Law.