Arizona borrowers who had a vehicle repossessed by Hughes Federal Credit Union between May 18, 2019, and August 4, 2023, are in line for a share of a $7 million class settlement, and they don’t have to file a claim to get it. The check, estimated at about $1,067 on average, is the smaller piece. The same deal resolves roughly $25.6 million that the credit union says those borrowers still owed after their cars and trucks were sold at auction, and the only form in the notice packet that a borrower might mail back is the one that keeps that debt in play.
The case is Harrison and Norton v. Hughes Federal Credit Union, No. C20232230, in Pima County Superior Court in Tucson. Judge Greg Sakall preliminarily approved the settlement in an order file-stamped July 30, 2026, and has set a final approval hearing for December 7, 2026, at 10 a.m. The credit union denies it broke the law and admits no liability.
Who is in the Hughes FCU settlement class
According to the settlement website’s FAQ and the court’s order, you are a class member if you financed a vehicle for personal, family, or household use through Hughes Federal Credit Union (or had such a loan assigned to it), pledged the vehicle as collateral, had it repossessed by HFCU or on its orders, had an Arizona address on the repossession date, and fall inside the May 18, 2019, to August 4, 2023, window.
The credit union’s records identify 3,815 loans, which the order calls Secured Obligations, and 4,548 borrowers once co-borrowers are counted. The FAQ notes that some situations fall outside parts of the deal, including borrowers who reinstated the loan and got the vehicle back before it went to auction. If that describes you, the settlement agreement spells out exactly where the line falls.
How a repossession letter turns into statutory damages
The lawsuit is about paperwork. After a lender repossesses a car, Arizona’s version of the Uniform Commercial Code requires it to send the borrower a notice before selling the vehicle. For consumer loans, A.R.S. § 47-9614 lists what that letter must contain, including a description of the borrower’s liability for any deficiency, a phone number where the borrower can get the amount needed to redeem the car, and a phone number or address for more information. The statute even prints a model form. A lender that fills it in correctly is generally covered.
The plaintiffs contend HFCU’s notices did not comply with the applicable provisions of Arizona’s UCC. The settlement papers I read do not identify which element of the letters they say fell short, and the court has not ruled on it.
What makes these cases worth bringing is the remedy. Under A.R.S. § 47-9625(C)(2), when the collateral is consumer goods, a borrower can recover “in any event” an amount no less than the credit service charge plus 10% of the loan’s principal. The borrower doesn’t have to prove the defective notice cost them a dime. On a hypothetical $20,000 car loan that carried $5,000 in finance charges, that floor is $7,000. Because the formula runs off numbers already sitting in the lender’s loan files, and because a lender typically sends the same form letter to every borrower, one defect in one template can become a claim held by thousands of people, each with a damages figure a spreadsheet can calculate.
That clause comes from the uniform version of the code, UCC § 9-625(c)(2), so the same exposure exists for auto lenders well beyond Arizona.
The settlement estimates that cash payments will equal about 14.69% of full statutory damages, with an average check of about $1,067. Working backward from those two figures, which is The Auto Wire’s math and not the parties’, the average full statutory claim comes to roughly $7,260. The money will be split pro rata based on each loan’s finance charge and amount financed, the same two inputs the statute uses, so borrowers with bigger loans and more interest will get bigger checks. Class members can look up an estimate on the Estimated Award Eligibility page with the Notice ID and PIN printed on their mailed notice.
The $25.6 million in deficiency balances
A repossession rarely ends the debt. The lender sells the vehicle, usually at auction, applies the proceeds to the loan, and bills the borrower for the rest, plus repossession and sale costs. HFCU represents that the claimed deficiencies across this class total about $25,603,000. Spread over 3,815 loans, that averages about $6,700 per loan, more than six times the average settlement check.
Whether a lender can collect a deficiency after a flawed notice is an unsettled question in consumer cases. Arizona’s deficiency statute, A.R.S. § 47-9626, sets burden-of-proof rules for commercial transactions and says the limitation to non-consumer deals is meant to leave the proper rule in consumer transactions to the courts. That is why the settlement calls these balances “disputed.” Instead of a judge deciding whether HFCU could collect them, the settlement resolves them through what the court’s order calls an accord and satisfaction.
That happens automatically for every class member who does not opt out, unless the borrower mails a document called the Election Not to Accept Compromise of Disputed Deficiency Balance, postmarked by November 20, 2026. A borrower who sends it keeps the cash payment and the credit-reporting relief but gives up the deficiency compromise. The notice does not explain who would benefit from doing that. Anyone tempted to mail it should call class counsel first, at 1-888-668-1225.
The third benefit is on the credit report. No later than 60 days after the settlement’s Effective Date, HFCU must ask the credit reporting agencies to delete the trade lines for the auto loans and deficiencies at issue. The agencies are separate companies, and the agreement limits what HFCU owes if one of them doesn’t delete a line.
How much that deletion is worth depends on when the repossession happened. Under the Fair Credit Reporting Act, a charged-off or collection account can be reported for seven years, with the clock starting 180 days after the delinquency that led to it began. A borrower who fell behind in early 2019 is close to the point where that entry would age off anyway. A borrower repossessed in mid-2023 could otherwise carry it into 2030, through several more car loans, apartment applications, and insurance quotes. Once the settlement takes effect, the official AnnualCreditReport.com site is the free way to confirm the line is gone.
Where the $7 million settlement fund goes
Class counsel, Flitter Milz, P.C., and Rubin & Bernstein PLLC, will ask for up to $2.8 million in fees, which is 40% of the cash fund, plus up to $50,000 in expenses. Each of the two class representatives, Dametrius Harrison and Vicki Jo Hines Norton, will request a $15,000 service award. If the judge grants all of it, about $4.12 million is left before administration costs are paid. The court can award less.
Forty percent of the cash will look steep to borrowers. The lawyers will point out that the cash is not the whole recovery. Counting the $25.6 million in deficiencies as part of the deal’s value, the requested fee is under 9% of roughly $32.6 million. Judge Sakall will weigh those two ways of keeping score at the December 7 hearing.
Uncashed checks don’t revert to HFCU. If more than $150,000 is left in the net fund after the first round of checks, the administrator sends a second distribution. Whatever remains after that goes to charitable purposes the court approves.
Deadlines and steps for Hughes FCU class members
The dates below come from the official settlement site and its key dates page.
- To get paid: Do nothing. No claim form is required. If the court grants final approval and any appeals are resolved, eligible class members receive a check and the deficiency and credit-reporting relief automatically.
- If you’ve moved: Use the Update Address page. A repossession that started in 2019 may mean several moves since, and checks go by mail by default.
- To be paid electronically: Use the Select Payment Method page and give the administrator the required information.
- November 20, 2026 (postmark): Deadline to opt out, to object, or to mail the Election Not to Accept Compromise of Disputed Deficiency Balance. Opting out means no money and no deficiency or credit relief, but it preserves your right to sue HFCU separately. Opt-out requests must be mailed and signed individually. Objections are filed with the court, with copies to the administrator and both sides’ lawyers.
- December 7, 2026, 10 a.m.: Final approval hearing in Pima County Superior Court. Class members who want to speak must file a Notice of Intention to Appear.
- Questions: Settlement administrator, 1-866-473-1092, or Harrison v HFCU, c/o Settlement Administrator, P.O. Box 23648, Jacksonville, FL 32241. Class counsel, 1-888-668-1225.
Taxes deserve a call to a preparer before filing season. The administrator will issue a Form 1099 for any cash payment over $2,000. HFCU says it will not issue 1099s for the resolved deficiencies unless an accounting firm the parties agreed on concludes they must be filed. The IRS generally treats forgiven debt as taxable income, with exceptions such as insolvency, so a borrower with a large deficiency should know how that firm comes down.
What this case means for borrowers outside Arizona
The Auto Wire has followed rising repossessions and the debt that follows a repo, and last month covered the Credit Acceptance settlement, which also forgave car debt for a class of borrowers. Hughes is a single credit union with a few thousand affected loans, and the size of the result comes from a one-line damages formula applied to a form notice the plaintiffs say went out on every repossession in the class.
Anyone who has lost a vehicle to repossession, in any state, should keep the notice the lender mailed afterward. It is the document these cases are built on, and the statute’s minimum-damages clause means its contents can matter more than the auction price. For Hughes borrowers, the near-term things to watch are the judge’s ruling on the fee request on December 7 and, about two months after the settlement’s Effective Date, whether the auto loan entry disappears from their credit reports.
When a lender’s post-repossession notice is defective, should the borrower’s remaining car debt be wiped out entirely, or should the lender still be able to collect what the auction didn’t cover?