Court Bars Five-Year-Old Centrix Financial Claims
KANSAS CITY – A group of credit union borrowers in the Centrix Financial subprime auto loan program is appealing last month’s ruling by a federal court here denying their claims that their cars were illegally repossessed by Missouri Central CU because the statute of limitations on such claims had expired.
The lower court ruled last month that two of the three claims in the suit must be dismissed because they were filed more than five years after the repos, so were barred under the statute of limitations. A third claim that the repossessions violated the Missouri Merchandising Practices Act was also dismissed because the court ruled the Act does not apply to credit unions.
The group filed notice of appeal yesterday with the U.S. Court of Appeals for the Eighth Circuit.
The credit union victory comes even as another credit union sued by Centrix borrowers, Kansas Teacher’s Community CU, has agreed to pay $2.6 million to settle class action claims related to the Centrix case.
Five years after its bankruptcy, the Centrix program, which provided subprime auto loans to some 320 credit unions, continues to vex credit unions. The Centrix bankruptcy caused tens of millions of losses to the biggest credit union participants, some of whom are still waged in court fights with borrowers around the country.