Credit Acceptance Corporation to pay $75 million, forgive $630 million in consumer debt to resolve alleged consumer protection violations
AG Ellison and 41 state AGs reach settlement that also requires subprime lender to fundamentally reform lending and monitoring practices
AG Ellison wins $7.5M in debt relief and $1M in refunds for Minnesotans harmed by CAC’s lending practices
September 17, 2026 (SAINT PAUL) — Minnesota Attorney General Keith Ellison and a bipartisan coalition of 41 state attorneys general reached a settlement today that requires subprime lender Credit Acceptance Corporation to pay the states $75.5 million and forgive more than $630 million in consumer debt nationwide. The agreement settles allegations in Attorney General Ellison’s consumer-protection lawsuit that Credit Acceptance Corporation (1) financed auto loans that it knew or should have known consumers could not afford and (2) financed the sale of expensive add-on products to auto sales that consumers did not know they were purchasing. The settlement also requires Credit Acceptance Corporate to fundamentally reform its lending practices.
Under the settlement, Minnesota consumers who were placed into risky auto loans are expected to receive more than $7.5 million in debt relief. Additional Minnesota consumers may receive more than $1 million in refunds. Consumers do not need to take any action and will be contacted if they receive either debt relief or a refund as part of the settlement.
“A car is a necessity for many Minnesotans and is the largest purchase some may ever make,” Attorney General Ellison said. “Credit Acceptance Corporation misled consumers to enter into expensive loans that the company knew were ‘Set Up to Fail,’ based on its own internal, company analysis. Credit Acceptance Corporation engaged in a vicious cycle of lending to consumers who could not afford their payments, collecting what it could, and then repossessing and reselling the car in an endless, fraudulent cycle. Today’s settlement will put an end to this unconscionable practice.”
As alleged in the Attorney General’s lawsuit, Credit Acceptance Corporation predicted how much money it would collect from a borrower when determining whether to lend to the consumer. The Attorney General’s lawsuit alleges that Credit Acceptance Corporation originated a large number of loans that it predicted consumers could not even repay the principal - let alone the interest. Yet the lawsuit alleges that Credit Acceptance Corporation still found that these loans were profitable because the company could repossess the vehicle and sell to it to another consumers, starting the cycle all over again.
The settlement also requires Credit Acceptance Corporation to reform its lending practices. First, if Credit Acceptance Corporation extends a loan to a consumer that historically resulted in a high risk of default, Credit Acceptance Corporation must disclose this information to the consumer. If the consumer agrees to the loan and then defaults within either the first 12 or 18 months (depending on the risk of the loan), Credit Acceptance Corporation must waive 95% of the amount the consumer owes under the loan. Credit Acceptance Corporation must refrain from commencing a collection lawsuit against these consumers.
Second, Credit Acceptance Corporation must take numerous steps to prevent auto dealers from adding optional products, such as vehicle service contracts or GAP (“Guaranteed Asset Protection”) products, to consumers’ purchases without their consent. This includes enhanced disclosures at the time of sale, and importantly, a post-sale disclosure that alerts the consumer to the purchase of these products and allows them to cancel the sale of the product.
The Attorney General’s Office encourages consumers with complaints about auto dealers or financing companies to contact the Office online or by phone at (651) 296-3353 or (800) 657-3787, or at (800) 627-3529 (Minnesota Relay). The Attorney General’s Office further encourages consumers to read the Office’s publications about cars, and credit and personal finance.
