Aug 8 (Reuters) - HSBC Holdings Plc has settled aU.S. probe accusing the British bank of illegally repossessingcars owned by members of the U.S. military while they wereserving their country, the Department of Justice said on Monday.
The bank's HSBC Finance Corp unit will pay $434,500 tosettle charges it violated the Servicemembers Civil Relief Actby repossessing 75 cars without getting needed court orders.
Some repossessions occurred even when HSBC's own recordssuggested that the borrowers might be protected servicemembers,the Justice Department said.
Monday's accord covers repossessions from 2008 to 2010, whenHSBC sold its car lending and servicing business to a unit ofSpain's Banco Santander SA. That unit settled similarcharges for more than $10.5 million in February 2015.
Most servicemembers covered by the HSBC settlement receivedpartial compensation through the Santander accord.
HSBC will pay them $5,500 each, and will pay $11,000 each tothose who did not receive payments, the Justice Department said.
The company has not made or serviced auto loans since 2010,and cooperated once alerted to the issue, the department added.
HSBC is pleased to settle, and "has the utmost respect forthose serving in the U.S. armed forces," spokesman Rob Shermansaid in a statement. (Reporting by Jonathan Stempel in New York; Editing by BernardOrr)