Acting Attorney General Cori Mills Announces Settlement with Subprime Auto Lender Credit Acceptance Corporation

September 17, 2026

(Anchorage, AK) - Alaska and 40 other states have reached a settlement with Credit Acceptance Corporation (CAC), one of the nation's largest auto finance companies for $709.5m in debt relief and cash payments. This settlement resolves allegations that CAC originated loans that it knew or should have known consumers could not afford. Under its terms, CAC will be required to provide hundreds of millions of dollars of debt relief and cash payments to people who were harmed by these unfair loans. The settlement also includes injunctive terms designed to meaningfully reform the company's lending practices help guard consumers from dealers "packing" CAC auto-loan contracts with unwanted products.

"This settlement gets relief directly back to the folks who were harmed," said Acting Alaska Attorney General Cori Mills. "It shows how states can work together to protect consumers."

For each loan, CAC predicted the percentage of the loan it was likely to collect and assigned the loan a score representing that percentage. The states allege that consumers could not reasonably afford many of CAC's low scoring loans, especially those where CAC predicted the consumer would not even pay back the loan's principal loan amount. Unsurprisingly, many of those low score loans resulted in consumers defaulting on their loans and losing their cars when they were repossessed and sold at auction.

The settlement also resolves allegations that CAC failed to prevent, and even encouraged, auto dealers to package additional service or financial products with CAC loans that would be financed by the CAC loan-such as vehicle service contracts and Guaranteed Asset Protection (GAP) products. The states allege that CAC's dealer compensation methodology and lack of reasonable dealer oversight resulted in dealers often adding these products to the loan by causing customers to believe that they could not get the loan without these products, or by just not informing customers that they were purchasing these products at all.

The settlement provides $60 million in cash for people who got particularly risky loans from CAC. In addition, for certain risky loans made between Nov. 1, 2015, and Nov. 30, 2025, CAC will provide $634 million in debt relief. People who are eligible for debt relief will be notified by CAC and people eligible for cash payments will be contacted by a claims administrator.

For consumers with certain risky CAC loans made since Dec. 2025, CAC must provide "off ramps" for loans that fail quickly. Qualifying consumers will get 95% debt relief, and CAC is prohibited from filing collections lawsuits against them. CAC must provide these off ramps for a five-year period starting on Nov. 2, 2026.

CAC will also pay $15.5 million to the Attorneys General, with Alaska receiving about $106,650.

The Attorneys General of Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, The District of Columbia, Florida, Georgia, Hawaii, Illinois, Indiana, Kentucky, Louisiana, Maine, Maryland, Michigan, Minnesota, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Utah, Vermont, Virginia, Washington, and Wisconsin joined this settlement. New York is concurrently settling litigation it brought against CAC in the Southern District of New York.

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Department Media Contact: Information Officer Sam Curtis at [email protected] or (907) 269-6269.

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