Five Star Bank $29.5M Vehicle Repossession Settlement

Five Star Bank and Financial Institutions Inc.

Individuals who received a repossession notice from Five Star Bank or Financial Institutions Inc. after their vehicle was repossessed and/or sold between May 16, 2011, and Sept. 30, 2021, may qualify to claim a cash payment and other benefits from a class action settlement.

Five Star Bank and Financial Institutions Inc. agreed to pay $29,500,000 to settle a class action lawsuit alleging they failed to provide proper post-repossession notices to borrowers as required by Pennsylvania and New York law.

Who can file a claim?

Class members must meet the following criteria:

They or any co-borrower had a vehicle loan with Five Star Bank or Financial Institutions Inc.
The bank repossessed their vehicle between May 16, 2011, and Sept. 30, 2021.
The bank sent them a notice following the repossession and/or sale of the vehicle during this period.

How much can class members receive?

The total settlement fund is $29,500,000. Before distributing funds to class members, the court will deduct attorneys’ fees, service awards to the lead plaintiffs and administrative costs. The settlement administrator will divide the remaining amount, known as the net settlement fund, among eligible class members.

In addition to cash payments, the settlement eliminates any outstanding deficiency balances the bank claimed after the sale of the repossessed vehicle. If the bank obtained a judgment for a deficiency, it will be marked as satisfied. The bank will also request that credit reporting agencies remove references to the auto loan from class members' credit reports.

If more than $100,000 remains after the first round of payments (due to uncashed or undeliverable checks), the settlement administrator will distribute a second round of payments. Any remaining balance after the second distribution will be split, with half going to the Pennsylvania Interest on Lawyers Trust Account and the other half divided between Philadelphia Legal Assistance and the Center for Elder Law & Justice in Buffalo, New York.

No action needed to receive payment

Class members do not need to file a claim to receive compensation. The settlement administrator will automatically send payments to eligible class members based on Five Star Bank and Financial Institutions Inc.'s records.

However, those who want to update their address can submit the information online. They must provide the notice ID and PIN from their settlement notice to do so.

The settlement administrator will send payment via paper check unless the class member contacts the settlement administrator to request another payment option.

Settlement administrator's contact information: Settlement Administrator, Chipego v. Five Star Bank, P.O. Box 23698, Jacksonville, FL 32241, 800-564-0758

$29.5 million settlement fund breakdown

The $29,500,000 settlement fund covers:

Settlement administration costs: To be determined
Attorneys' fees: Up to $11,800,000
Attorneys' expenses: Up to $150,000
Service awards to class representatives: $40,000 each for four plaintiffs ($160,000 total)
Payments to eligible class members: The remainder of the fund

Important dates

Exclusion (opt-out) deadline: Oct. 13, 2025
Final fairness hearing: Nov. 4, 2025

When is the Five Star Bank settlement payout date?

The settlement administrator will distribute payments after the court grants final approval of the settlement and resolves any appeals.

Why is there a class action settlement?

The class action lawsuit alleged Five Star Bank and Financial Institutions Inc. failed to send legally required post-repossession notices to borrowers in Pennsylvania and New York after repossessing vehicles.

The companies deny any wrongdoing and maintains that its notices complied with the law. Both sides agreed to settle to avoid the risks and costs of continued litigation, including a potential trial and appeals.