Credit Acceptance Corp. has agreed to a multimillion-dollar settlement with 40 states and the District of Columbia to resolve allegations of predatory lending stemming from complaints and investigations dating back to 2020. The subprime auto finance source did not admit fault or wrongdoing.

A Credit Acceptance press release states the company will pay $60 million to a consumer relief fund, send $15.5 million to the participating attorneys general for investigation costs, and waive all outstanding balances for certain customers. AG-issued releases say the total obligation is just over $700 million, including $388 million in debt relief for customers whose vehicles were repossessed and $246 million for those whose vehicles were not repossessed.

The company says no monetary component will require charges beyond amounts previously accrued.

“This resolution provides certainty for our business, our dealer partners and the customers we serve,” writes CEO Vinayak Hegde. “The resolution allows us to keep our full attention on helping consumers who may have limited financing options obtain access to reliable transportation and the opportunity to improve their financial lives over time.”

Regulators paint a different picture. “This company preyed on vulnerable North Carolinians by convincing them to take out car loans they couldn’t afford,” writes North Carolina AG Jeff Jackson. “We’re getting money back for a lot of those customers, and we’re making sure that they can’t harm other people in this way again.”

“CAC preyed on consumers in New York and across the nation with false promises of affordable loans, only to exploit them with outrageous interest rates that ruined their credit and cost them their cars,” adds New York AG Letitia James. “By continuing our case to hold CAC accountable, we secured hundreds of millions of dollars in debt relief and restitution for all those who were taken advantage of by their schemes.”

Read more at Credit Acceptance