State Farm Bank Over $110M Settlement for Repossession Notice Failures and Deficiency Write Offs

State Farm Bank and affiliated companies have agreed to a class settlement worth over $110 million to resolve claims that they failed to provide legally required presale notices and post-sale explanations to borrowers whose secured property was repossessed and sold. The deal creates a $35 million cash fund (automatic payments, no claim form needed), cancels at least $75 million in alleged deficiency balances, and includes requests to delete related negative entries from the four major credit bureaus; the defendants deny wrongdoing but settled to avoid trial. You may qualify if your property was repossessed and you were mailed both the presale and post-sale notices on or after July 25, 2017; the opt-out deadline to preserve separate legal claims is April 23, 2026, and a fairness hearing is set for May 6, 2026. Beyond this case, the settlement underscores how repossession notice compliance and credit reporting practices can drive significant consumer litigation: many state laws require specific pre- and post-sale disclosures, and credit reporting is governed by the Fair Credit Reporting Act, so errors or omissions can ripple into collection activity and credit-score harms. Similar lawsuits against lenders and servicers have produced write-offs, cash payouts, or credit corrections, prompting industry participants to tighten notice and reporting procedures; practical notes for class members include that benefits are automatic if you do nothing, opting out preserves your right to sue, and the parties have agreed not to issue 1099-C forms though class members should consult tax professionals about potential consequences.