Oregon Attorney General announces $694 million settlement helping Oregonians in predatory auto loans
BEND, Ore. (KTVZ) -- Oregon Attorney General Dan Rayfield announced a $694 million settlement with subprime auto lender Credit Acceptance Corp. following a multistate investigation into predatory financing practices.
Oregon will receive just over $754,000 under the agreement. The state's allocation includes $548,431 in debt relief for 58 Oregonians, $96,142.35 in restitution for 67 Oregonians and $109,772.03 directly to the state.
The settlement, joined by attorney generals from 40 other states, resolves allegations that the lender was responsible for vehicle loans consumers could not afford and permitted auto dealers to pack contracts with unwanted add-on products.
The investigation is focused on Credit Acceptance Corp. using internal scoring to issue low-rated loans despite predicting that many borrowers would default or fail to pay back even the principal balance.
The attorney generals alleged that the company's dealer compensation structure encouraged aggressive sales of Vehicle Service Contracts and Guaranteed Asset Protection products without clear consumer consent.
Rayfield emphasized the impact of the settlement on state residents facing high-cost loans.
“This settlement holds Credit Acceptance accountable for years of predatory lending and dealer abuse and it puts money and real debt relief back in the hands of the Oregonians who were impacted,” Rayfield said. “For struggling consumers, these kinds of loans can become a debt trap that is almost impossible to escape.”
Across the nation, the settlement provides $60 million in cash restitution for consumers who received particularly risky loans between Nov. 1, 2015 and Nov. 30, 2025. Credit Acceptance Corp. must also provide $388 million in debt relief to borrowers whose vehicles were repossessed and $246 million in debt relief to consumers whose vehicles were not repossessed, allowing them to keep their cars. The company must pay an additional $15 million to the participating state attorney generals.
The agreement requires Credit Acceptance Corp. to implement injunctive reforms to alter its lending practices. For seven years, the company must cap vehicle prices at 109% of retail book value for certain consumers and enforce mechanisms preventing dealers from inflating prices based on creditworthiness. The company must also provide pre-loan risk disclosures and establish pre-purchase and post-purchase processes that alert consumers to added products and facilitate easier cancellations.
For high-risk loans originated beginning in December 2025, Credit Acceptance Corp. will offer off-ramp options for loans that fail quickly. Qualifying consumers will receive 95% debt relief and the company is prohibited from filing collections lawsuits against them for a five-year period.
The settlement is scheduled to become effective Nov. 2, 2026.
Credit Acceptance Corp. will directly notify customers eligible for debt relief, while an independent claims administrator will contact consumers eligible for cash restitution.
