May 8 (Reuters) - The U.S. government on Wednesday sued

Hyundai and Kia's American financing

arm, accusing it of repossessing vehicles leased by military

service members without first obtaining court permission as

required by law.

According to a complaint filed in federal court in Los

Angeles, Hyundai Capital America violated the Servicemembers

Civil Relief Act between 2015 and 2023 by repossessing 26

vehicles whose owners had begun paying off their loans prior to

active duty.

The Department of Justice has said that Armed Forces members

should not suffer financial hardship because of their service.

In the complaint, the Justice Department cited as an example

the 2017 repossession and sale of Navy Airman Jessica Johnnson's

three-year-old Hyundai Elantra, after the financing arm

determined that she was on active duty but "not deployed."

Johnson still owed $13,796 on the car, and the financing arm

realized in 2020 it should not have repossessed it, the

complaint said.

Hyundai Capital America, which is based in Irvine,

California, and the automakers did not immediately respond to

requests for comment.

The lawsuit seeks to halt improper repossessions and a

declaration that the matter concerned "an issue of significant

public importance."

The Justice Department in the last several years settled

claims under the servicemembers law against several financing

companies, including General Motors, Nissan and Wells Fargo

finance arms.

The case is U.S. v. Hyundai Capital America, U.S. District

Court, Central District of California, No. 24-03818.