- Massachusetts AG Maura Healey reached a settlement with national subprime auto lender Credit Acceptance Corporation ("CAC") to resolve allegations that CAC engaged in unfair and deceptive practices in originating, collecting, and securitizing subprime auto loans in violation of the Massachusetts Consumer Protection Act.
- As previously reported, the complaint alleged, among other things, that CAC made subprime loans it knew borrowers could not repay and thereby caused many borrowers credit harm and the loss of their vehicles or down payments, charged hidden finance fees which resulted in CAC loans exceeding the state law usury ceiling of 21%, and failed to inform investors that its packaged pools of loans included loans with higher risk than was described in its disclosures.
- Under the terms of the assurance of discontinuance, CAC agreed to pay $27.2 million into an independent trust to be used for restitution for thousands of eligible customers as well as for payment of settlement implementation costs and of the AG office's investigation costs. CAC also agreed to abide by Massachusetts laws and regulations with respect to loan initiation and servicing practices, including providing borrowers with proper disclosures and notices, and it agreed to, upon the AG's request, contact credit bureaus to request the deletion of certain negative credit information about its customers, among other things.
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