The settlement mandates a $60 million payment into a consumer relief fund, while an additional $15.5 million will cover costs for the participating states. Beyond these cash payments, the company has committed to providing debt relief by waiving outstanding balances for specific affected customers. The litigation, initiated in early 2023 by New York Attorney General Letitia James, centered on accusations that the lender pushed subprime and deep subprime borrowers into high-cost loans often featuring interest rates near 22 percent.
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Credit Acceptance Settles Predatory Lending Suits for $75.5 Million
Forty-one state attorneys general have secured a $75.5 million settlement from Credit Acceptance Corporation, concluding a year-long legal battle over allegations of predatory auto lending. The agreement resolves claims that the company targeted low-income consumers with deceptive loan terms and exorbitant interest rates, though the firm admits no wrongdoing.
Credit Acceptance maintains that the resolution will not require further financial charges, as the settlement amounts were already accounted for in previous financial disclosures. Despite the scale of the payout, the company finalized the consent judgments without acknowledging liability for the alleged deceptive and abusive practices. The agreement effectively closes the multi-state investigation, allowing the lender to avoid the uncertainty of ongoing court proceedings.
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