Credit Acceptance Agrees to $710 Million Auto-Lending Settlement

Credit Acceptance Corp agreed to a multistate settlement worth roughly $710 million. The agreement includes $634 million in debt forgiveness for more than 55,000 borrowers, $60 million in restitution and a $15.5 million payment to participating state attorneys general. The company will warn borrowers when loans carry a historically high risk of default, waive 95% of remaining debt for qualifying early defaults and refrain from suing to collect or selling that debt. Credit Acceptance denied wrongdoing and settled without admitting liability. State regulators said the changes address underwriting, disclosure and dealer-monitoring concerns. The settlement follows allegations that the company issued unaffordable subprime auto loans to low-income borrowers and allowed dealers to sell undisclosed or unnecessary add-on products. Outlets differed on the headline total: MarketWatch cited $75.5 million while MarketScreener cited $694 million, against the roughly $710 million figure that combines the forgiveness, restitution and attorneys general payment.