Credit Acceptance Corporation has reached a $694 million multistate settlement with a bipartisan coalition of 41 state attorneys general, resolving allegations that the subprime auto lender engaged in predatory financing practices that pushed financially vulnerable consumers into default and repossession. According to the Michigan Attorney General’s office, the agreement provides $60 million in direct remediation for consumer losses alongside hundreds of millions in debt relief nationwide for borrowers who secured risky loans between November 1, 2015, and November 30, 2025.
Scope of the Subprime Auto Loan Settlement
The settlement addresses long-standing regulatory scrutiny regarding how Credit Acceptance Corporation originated loans for car buyers with low or limited credit scores. Regulators charged that the 54-year-old company made high-cost deals that it knew or should have known borrowers could not afford, creating a downward spiral of inescapable debt according to statements from Michigan Attorney General Dana Nessel. Under the terms of the agreement filed with the Securities and Exchange Commission, Credit Acceptance Corporation made no admission of wrongdoing or liability.
The financial resolution is divided into specific remediation pools and state payments. According to company disclosures, the agreement includes:
- $60 million paid directly by Credit Acceptance Corporation to remediate alleged consumer losses.
- $388 million in nationwide debt relief allocated for consumers who took out qualifying loans during the ten-year window and subsequently had their vehicles repossessed.
- $246 million in nationwide debt relief for eligible borrowers who received risky loans but did not experience a repossession, allowing them to retain their vehicles.
- $15.5 million paid directly to participating state attorneys general.
- $790,474 allocated specifically to the state of Michigan, which accounts for about $70.3 million in total debt forgiveness for local borrowers, according to the Michigan Attorney General’s office.
Eligibility and Consumer Notification Process
According to company announcements, consumers eligible for specific debt relief will receive direct notifications from Credit Acceptance Corporation. Meanwhile, individuals eligible for cash restitution will be contacted directly by a dedicated settlement administrator.
The company noted in a statement that it has not modified the terms of existing customer contracts outside the scope of the agreement. However, the settlement provides for partial forgiveness of deficiency balances for certain eligible accounts originated on or after December 1, 2025, provided specific conditions outlined in the settlement framework are met.
Corporate Impact and Regulatory Clarity
Headquartered in Southfield, Michigan, Credit Acceptance Corporation is one of the nation’s largest specialized auto finance companies. In a press release issued on September 17, corporate leadership welcomed the conclusion of the multistate inquiry. The management team stated that the resolution establishes clearer regulatory expectations for industry participants and enables the firm to focus on core operations, supporting dealer partners, and executing its long-term business strategy.
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