Credit Acceptance settles with 40 states and DC over lending practices
The lender will pay $15.5 million to participating attorneys general and fund a $60 million consumer remediation trust, without admitting wrongdoing.
Published
Credit Acceptance has entered consent judgments with the attorneys general of 40 states and the District of Columbia, resolving a lawsuit filed by New York's attorney general in 2023 along with a related multistate investigation.
Under the agreements, the company will pay $15.5 million to the participating attorneys general and contribute $60 million to a trust set up for consumer remediation. It will also waive outstanding balances for certain customers, a form of debt relief estimated at $634 million. The settlements are subject to court approval, and Credit Acceptance admits no wrongdoing.
The company says the monetary components will not require charges beyond amounts already accrued and disclosed in its financial statements.
Because Credit Acceptance had already reserved for these costs, the settlement removes legal uncertainty without producing a surprise hit to its balance sheet. The $634 million in waived balances is a real economic loss, but the fact that the cash components fit within existing accruals suggests the market had already priced much of this in. Resolving a 40-state investigation also clears away a source of ongoing legal risk for the company going forward.