The Five Star Bank class action lawsuit ended in a $29.5 million settlement covering about 6,358 borrowers in New York and Pennsylvania whose vehicles the bank repossessed between May 16, 2011, and September 30, 2021. On top of the cash, Five Star Bank agreed to wipe out roughly $51.6 million in disputed deficiency balances and to have class members’ related auto loan trade lines removed from their credit reports. The bank denies liability. Preliminary approval came on July 29, 2025, and a final fairness hearing was set for November 4, 2025.
Who Is Covered by the Settlement
The class includes people who had a vehicle repossessed by Five Star Bank and received one or more of the challenged notices between May 16, 2011, and September 30, 2021. That works out to about 6,358 borrowers: roughly 5,995 in New York (from about 4,993 loans) and about 403 in Pennsylvania (from 322 loans).
The settlement fund is split along the same lines. New York class members share 94.2% of the fund, and Pennsylvania class members share 5.8%.
What Class Members Get
Cash Payment
After deductions for attorneys’ fees, expenses, service awards, and administration, the remaining money is divided among class members in proportion to what each borrower paid on the repossessed vehicle loan. Larger payments go to borrowers who paid more before the repossession.
No claim form is required. Payments go out automatically by check unless a class member picks a different payment method through the settlement website. If more than $100,000 is left over after the first round because checks go uncashed or undeliverable, a second distribution follows.
Debt Wiped Out
Five Star Bank agreed to stop collecting on the disputed deficiency balances, which the bank itself valued at about $55.3 million. Within seven days of signing the agreement, the bank had to stop starting any new enforcement actions like garnishments or levies. Within 30 days of the settlement’s effective date, all existing collection efforts must end.
The bank also agreed to have about 1,294 existing money judgments against class members marked satisfied within 60 days of final approval.
Credit Report Cleanup
Five Star Bank agreed to ask the credit reporting agencies to delete all trade lines tied to the affected auto loans from class members’ credit files. If a trade line is not deleted after the first request, the bank committed to making additional deletion requests. If a borrower files a dispute with a credit bureau about one of these debts, the bank agreed not to verify it.
What the Lawsuit Alleged
The case, Chipego et al. v. Five Star Bank et al., was filed in the Court of Common Pleas for Philadelphia County in May 2017. The plaintiffs alleged that when Five Star Bank repossessed vehicles, its pre-sale notices did not tell borrowers whether the vehicle would be sold at a public or private sale, did not give the date and place of any public auction, did not explain the borrower’s right to an accounting of the remaining debt, and did not itemize the amount needed to redeem the vehicle. Article 9 of the Uniform Commercial Code, as adopted in New York and Pennsylvania, requires those disclosures.
The plaintiffs also challenged the deficiency notices the bank sent after auction sales, claiming they failed to itemize expenses properly or present the required information in the order set by UCC Section 9-616 in both states. The trial court certified the case as a class action on September 30, 2021, and the Pennsylvania Superior Court affirmed that certification in March 2024. The parties reached an agreement in principle on February 28, 2025.
Approval Status and Deadlines
The court granted preliminary approval on July 29, 2025. The deadline for class members to opt out of or object to the settlement was October 13, 2025. The fairness hearing on final approval was scheduled for November 4, 2025, at 9:15 a.m.
Payments depend on the court granting final approval and on the resolution of any appeals that follow. Final approval had not been confirmed and no payments had been distributed as of the most recent information from the settlement website.
How to Reach the Settlement Administrator
Class members with questions can contact the settlement administrator by phone at 800-564-0758, by email at info@fivestarbankrepoclassaction.com, or by mail at Chipego v. Five Star Bank, P.O. Box 23698, Jacksonville, FL 32241. To update a mailing address, use the notice ID and PIN from the settlement notice at FiveStarBankRepoClassAction.com.