HSBC settles U.S. probe into seizures of soldiers' cars

Aug 8 (Reuters) - HSBC Holdings Plc (HKSE: 0005.HK - news) has settled a U.S (Other OTC: UBGXF - news) . probe accusing the British bank of illegally repossessing cars owned by members of the U.S. military while they were serving their country, the Department of Justice said on Monday.

The bank's HSBC Finance Corp unit will pay $434,500 to settle charges it violated the Servicemembers Civil Relief Act by repossessing 75 cars without getting needed court orders.

Some repossessions occurred even when HSBC's own records suggested that the borrowers might be protected servicemembers, the Justice Department said.

Monday's accord covers repossessions from 2008 to 2010, when HSBC sold its car lending and servicing business to a unit of Spain's Banco Santander SA. That unit settled similar charges for more than $10.5 million in February 2015.

Most servicemembers covered by the HSBC settlement received partial compensation through the Santander accord.

HSBC will pay them $5,500 each, and will pay $11,000 each to those who did not receive payments, the Justice Department said.

The company has not made or serviced auto loans since 2010, and cooperated once alerted to the issue, the department added.

HSBC is pleased to settle, and "has the utmost respect for those serving in the U.S. armed forces," spokesman Rob Sherman said in a statement.

(Reporting by Jonathan Stempel in New York; Editing by Bernard Orr)