Wells Fargo is facing a U.S. investigation into whether it improperly repossessed cars owned by members of the military, according to two people with knowledge of the probe.

In their review, the Justice Department and bank regulators are examining Wells Fargo's compliance with the Servicemembers Civil Relief Act, which in most cases requires that firms obtain a court order before seizing vehicles from soldiers, sailors, airmen and Marines. The government and Wells Fargo have begun discussing how to compensate borrowers who might have been affected, said one of the people, who asked not to be named because the investigation isn't public.

Shielding soldiers from financial stress has been a priority for lawmakers, and the Justice Department has recently stepped up enforcement actions against banks for taking assets illegally. Banco Santander SA's U.S. unit agreed to pay $9 million last year over allegations that it improperly confiscated 1,112 vehicles from military members, the largest settlement ever obtained in a case involving repossessions of automobiles with delinquent loans.

Catherine Pulley, a spokeswoman for Wells Fargo, declined to comment. Spokesmen for the Justice Department and the Office of the Comptroller of the Currency, which regulates Wells Fargo's banking unit, also declined to comment.

Lenders often hire contractors to resolve issues with unpaid loans, including taking back property from those who fail to meet their obligations. It couldn't be determined whether Wells Fargo used a third-party in the cases the government is reviewing, how the bank's actions might have violated the law or how many vehicles could be involved.

In a May regulatory filing, San Francisco-based Wells Fargo said it had $61 billion in outstanding auto loans, with $55 million of those at least 90 days past due.

Wells Fargo — the world's most valuable bank — has branches on eight U.S. military bases, include Fort Bliss in Texas, Georgia's Fort Benning, Fort Dix in New Jersey and Hill Air Force Base in Utah. On its website, the bank says it has "a history of making banking easier for our servicemen and servicewomen."

The bank has previously been accused of not adhering to the military lending law, which Congress approved decades ago to protect soldiers from legal hassles while they're on active duty.

It was one of five of the nation's biggest mortgage servicers that agreed to pay $123 million to military members for improper home foreclosures following the 2008 financial crisis. Wells Fargo's share was $28 million to be paid to 239 borrowers, according to a statement issued by the Justice Department last year. It didn't admit or deny the allegations.

In the Santander case, the Justice Department first learned that vehicles might have been repossessed illegally through a referral from the U.S. Army's legal assistance program. The referral involved allegations that the bank took a soldier's car in the middle of the night after being told that he was at basic training. Santander didn't admit or deny the department's claims.

Capital One Financial Corp. agreed to pay $12 million in 2012 over a wider range of allegations that also included improper vehicle seizures. The bank acknowledged that it might not have been in compliance with the law.

A frequent problem in investigations involving asset repossessions is that lenders lack awareness of a borrower's eligibility for protections. While the Department of Defense maintains a database accessible to banks, recent studies by the U.S. Government Accountability Office found that loan servicers often didn't check military status. Thousands of people haven't received proper benefits under the law and oversight by regulators "has been limited," the GAO has said.

John Odom Jr., a retired Air Force judge advocate whose Shreveport, Louisiana-based law practice has focused on such cases, said it's difficult to track how widespread violations of the servicemembers act might be, because it affects a large population that's often on the move.

"I think the chances are very, very high that there are a lot of them out there," Odom said.

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