Mass Attorney General Secures $27 Million Settlement From Subprime Auto Lender

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In full transparency, the following is a press release from the Massachusetts Attorney General’s office submitted to SOURCE media.

BOSTON – In the largest settlement of its kind, national subprime auto lender Credit Acceptance Corporation (CAC) will pay more than $27 million to settle a lawsuit brought by Massachusetts Attorney General Maura Healey over a variety of alleged unfair practices relating to the company’s role in the origination, collection, and securitization of subprime auto loans.

The settlement, which was filed today in Suffolk Superior Court, requires CAC to pay a total of $27.2 million, and provide debt relief and credit repair to thousands of Massachusetts borrowers.




Over 3,000 borrowers across the state are expected to be eligible for settlement funds, including many residents of marginalized communities in Springfield, Boston, Worcester, and Brockton. The settlement also requires CAC to make changes to its loan handling practices. 

“Thousands of Massachusetts consumers, many of them first-time car buyers, put their faith in CAC to help them with an auto loan, but were instead lured into high-cost loans, fell deeper in debt, and even lost their vehicles,” said AG Healey. “With this significant $27 million settlement, eligible Massachusetts drivers who have been suffering under the weight of a crushing car loan due to CAC’s deceptive practices will be able to receive relief and avoid new defaults. Predatory car loans, like predatory student loans or mortgages, hurt families and communities. Through our ongoing, extensive investigation into the subprime auto industry, we have a proven record of taking action and getting results for our residents who have been exploited by unscrupulous lenders.”

The AG’s Office sued CAC in August 2020 over the company’s practices relating to the origination, collection, and securitization of subprime auto loans. Specifically, the lawsuit alleged that CAC made high-interest subprime auto loans that it knew or should have known many borrowers would be unable to repay. The AG’s lawsuit noted that while the company profited from these loans, borrowers experienced credit harm, and, in some instances, lost their vehicles or down payments. The complaint also alleged that some CAC borrowers were subject to hidden finance charges, which resulted in violations of the state’s 21 percent usury cap and that CAC engaged in unlawful collection practices. The AG’s lawsuit also contained allegations that CAC failed to inform investors that it topped off securitization loan pools with higher-risk loans. 

The AG’s action against CAC is part of her Office’s ongoing industry-wide review of securitization practices in the subprime auto loan market. AG Healey has been a national leader in holding subprime auto lenders accountable. In 2019, she reached a $5.5 million settlement with Exeter Finance for its alleged role in financing unfair subprime auto loans. Her office previously secured a similar settlement with Santander requiring the company to pay $22 million and provide over $7 million in debt relief to Massachusetts borrowers. The AG’s Office also obtained $12.9 million under settlements with Westlake Financial Services, American Credit Acceptance, and Santander over allegations that the companies charged usurious interest rates on auto loans. 


This matter was handled by Burt Feinberg, Peter Leight, Diana Hooley, David Lim, Madonna Cournoyer, Michael Sugar, Leah MacArthur, and Glenn Kaplan, with assistance from Arwen Thoman, Amanda Hesse, Lilia DuBois, Maggie Wallace, Gia Kim, and Rebecca Dutra, all from the Attorney General’s Insurance and Financial Services Division.

Borrowers eligible for relief under today’s settlement will be contacted by the AG’s Office. Borrowers with questions about settlement eligibility should contact AG Healey’s Insurance and Financial Services Division at 617-963-2240.


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