NEW YORK - A step in the right direction, as far as New York credit unions are concerned, the 2nd U.S. Circuit Court of Appeals has ruled that people accused of driving while intoxicated (DWI) can have a prompt hearing to challenge the seizure of their vehicles. Prior to the ruling, owners had to wait for civil forfeiture proceedings to officially challenge impoundment. "These civil proceedings usually didn't have to take place immediately after a criminal proceeding," says Michael Lanotte, Sr. vice president and general counsel for the New York State Credit Union League. "Sometimes they took place months or years after the arrest. Lienholders, including credit unions, then would be left without notice of this long-term seizure. It would turn into a situation in which members ran the risk of defaulting on their car loans." According to a Sept. 19th New York Times article, "The car of one plaintiff, Clarence Walters, was seized on March 15, 1999 . . . It was not returned until May 2001, though he had pleaded guilty two years earlier to driving while impaired . . . He had no opportunity to challenge the city's retention of the car." In 1999, New York City began impounding the cars of people arrested for DWI. Already in place was a law that allowed for the seizing of property "suspected of having been used as a means of committing a crime or employed in aid of further assistance of a crime." Under the new federal court ruling, the wait for civil proceedings for DWI cases was found to be a violation of one's constitutional rights and the due process clause. The panel of three judges wrote . . . "plaintiffs have a right under the Fourteenth Amendment to ask what `justification' the City has for retention of their vehicles during the pendency of proceedings . . . and to put that question to the City at an early point after seizure in order to minimize any arbitrary or mistaken encroachment upon plaintiffs' use and possession of their property." Lanotte hopes that other municipalities in the state will adopt the new ruling. "More so, we are hopeful this will lead to enactment of a statewide law for uniformity," he says. "What we're hopeful for now is that this remedy will evolve into proper and timely notice to leinholders so that their due process is equally protected," says Lanotte. "That is the next step." Early this spring, Governor George Pataki pocket vetoed the Innocent Lienholder Bill which would have created standardized lienholder notification across the state. Currently, the right of auto lienholders varies from town to town. Some municipalities are required to provide lienholder with a notice of seizure during a specific time period (up to 20 days is appropriate), and others aren't required to do anything. NYSCUL is part of the New York State Alliance for Lienholder Interest Enforcement & Notification, a coalition still pressing for the Innocent Lienholder Bill. "Now that we have a court appeals decision, it will hopefully help sway the governor to take action," says Lanotte. - email@example.com
Fast challenge to vehicle impoundment bodes well for New York lienholders, credit unions
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