HARRISBURG, PA — Pennsylvania consumers are expected to receive more than $20 million in debt relief and restitution under a multistate settlement with Credit Acceptance Corp. that resolves allegations the auto lender made unaffordable loans and added unwanted products to financing contracts. The agreement takes effect Nov. 2 as part of $694 million in nationwide consumer relief.
Qualifying Pennsylvania borrowers are estimated to receive more than $17 million in debt relief and about $2.97 million in restitution, according to Attorney General Dave Sunday’s office. Pennsylvania is also expected to receive $469,623 for future consumer-protection and education efforts.
The settlement was reached by Pennsylvania and attorneys general representing 40 other states and jurisdictions. It resolves allegations against Credit Acceptance, one of the nation’s largest auto finance companies, involving loans made to borrowers with limited or impaired credit histories.
The states alleged Credit Acceptance originated loans it knew or should have known consumers could not afford based on its own internal evaluations. Some borrowers subsequently defaulted and had their vehicles repossessed and sold at auction, according to the Pennsylvania Attorney General’s Office.
“This auto loan company did not do their due diligence to ensure the loans they were providing were appropriate for consumers,” Sunday said. He also alleged that unnecessary add-on products increased borrowers’ financial burdens.
Nationwide, the agreement provides $60 million in cash restitution for consumers who received certain higher-risk loans.
Credit Acceptance will also provide $388 million in debt relief by Nov. 2 for qualifying borrowers whose vehicles were repossessed and $246 million for qualifying borrowers whose vehicles were not repossessed, allowing those consumers to retain their vehicles.
Those debt-relief provisions apply to certain loans originated between Nov. 1, 2015, and Nov. 30, 2025. Credit Acceptance will make an additional $15 million payment to the participating attorneys general.
The agreement also imposes changes on the company’s lending practices. For certain qualifying loans originated beginning in December 2025 that fail quickly, Credit Acceptance must provide borrowers with 95% debt relief and cannot pursue collection lawsuits against them.
That requirement will remain in place for five years beginning Nov. 2, 2026.
The settlement also establishes procedures intended to prevent dealers from adding unwanted Vehicle Service Contracts and Guaranteed Asset Protection products to Credit Acceptance financing agreements. Requirements include enhanced disclosures before purchase, post-purchase notices and a process intended to make cancellation easier, along with dealer monitoring.
Credit Acceptance must provide borrowers with pre-loan disclosures addressing default risks and vehicle values. For seven years, the company must also cap vehicle prices at 109% of retail book value for certain consumers.
The lender must establish procedures designed to prevent dealers from increasing vehicle prices based on a borrower’s creditworthiness or charging more than an advertised price.
Credit Acceptance will notify customers who qualify for debt relief. A claims administrator will contact consumers eligible for restitution.
The settlement’s executive committee includes the attorneys general of Maryland, Arkansas, California, Illinois, Minnesota and New Jersey. Pennsylvania joined the agreement with attorneys general from more than 30 other states and the District of Columbia, while New York is separately settling litigation it brought against Credit Acceptance in federal court.
Pennsylvania’s Department of Banking and Securities identifies motor vehicle finance companies among the non-depository businesses it regulates, while the Attorney General’s Office investigates potential unfair and deceptive practices involving the financing of goods and services.
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