Published
September 24, 2026
Certain Credit Acceptance borrowers with high-risk car loans made between November 2015 and November 2025 will have their remaining balances erased under a $694 million settlement with New York and 40 other attorneys general announced in September 2026. The relief is automatic and takes effect by November 2, 2026; there is no claim form, and eligible borrowers will be contacted.
What Is This About?
Credit Acceptance Corporation, a Southfield, Michigan auto finance company that buys car loans from dealers selling to buyers with poor or limited credit, agreed on September 17, 2026 to settle a six-year multistate investigation and a 2023 federal lawsuit brought by New York. The package is valued at $694 million: $388 million in debt forgiveness for borrowers whose cars were repossessed, $246 million in debt forgiveness for borrowers who still have their cars, and $60 million in cash restitution. Credit Acceptance will also pay $15.5 million to the states.Forty attorneys general, covering 39 states and the District of Columbia, are entering consent judgments in their own courts, led by an executive committee of Maryland, Arkansas, California, Illinois, Minnesota and New Jersey. New York resolved its separate case, People of the State of New York v. Credit Acceptance Corporation, No. 1:23-cv-00038-JMF, in the U.S. District Court for the Southern District of New York, where the parties filed a proposed consent order and judgment for Judge Jesse M. Furman on the same day. Credit Acceptance denied the allegations and settled without admitting any wrongdoing.
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Status
Settled — Effective November 2, 2026
Announced September 17, 2026 · no admission of wrongdoing
Consumer Relief
$694 Million
$634M in debt forgiveness · $60M cash restitution · plus $15.5M paid to the states
Can I Claim?
No claim form — relief is automatic
Credit Acceptance notifies debt-relief borrowers · a settlement administrator notifies restitution recipients
What the States Alleged
Credit Acceptance assigns every loan it buys a proprietary Credit Acceptance Score, which works as a forecast of how much of the loan it expects to collect from all sources, including repossession. The attorneys general allege the company approved many loans with low scores that it knew or should have known the borrower could not afford, including loans where its own forecast showed the borrower would not repay even the principal. According to the states, many of those borrowers defaulted, and their cars were repossessed and sold at auction.The states also allege that the way Credit Acceptance paid dealers, combined with weak dealer oversight, encouraged dealers to pack its loans with vehicle service contracts and guaranteed asset protection (GAP) coverage. Buyers either did not realize they were paying for those add-ons or were told they had to buy them to get financing, the states say. New Jersey's announcement adds an allegation that the company targeted credit-challenged and low-income buyers with offers to help improve their credit, then subjected them to aggressive collection tactics. None of these allegations was proven in court.
The Consumer Financial Protection Bureau originally sued Credit Acceptance alongside New York in January 2023. According to New Jersey's attorney general, the CFPB dropped its case in 2025, and the states continued without it.
Who Gets Debt Relief
The $634 million in debt forgiveness goes to two groups defined in the consent judgments. Both are limited to loans originated from November 1, 2015 through November 30, 2025 that were still open on December 1, 2025, where the borrower had a Credit Acceptance Score below 56 and a monthly car payment equal to 13% or more of monthly income when the loan was made.- Borrowers whose car was repossessed or voluntarily surrendered and sold within 18 months of the loan. Credit Acceptance must waive the entire remaining balance, an amount estimated at $388 million.
- Certain other qualifying borrowers whose car was never repossessed and sold. Credit Acceptance must waive the entire remaining balance, estimated at $246 million, release its lien and send the borrower the vehicle's title if it holds it. These borrowers keep their cars.
For both groups, Credit Acceptance must stop reporting the accounts to the credit bureaus, ask the three major bureaus to delete the trade lines, stop all collection activity, and never sue on or sell the accounts. The relief is due on or before November 2, 2026, and the company must then notify each borrower by letter, email or text that the account is closed, nothing more is owed and any lien has been released.
Borrowers have no way to look up their own Credit Acceptance Score, so there is nothing to check or apply for. Credit Acceptance says fewer than 3% of its open accounts are affected.
The $60 Million Restitution Fund
Separately from the debt forgiveness, Credit Acceptance must pay $60 million into a trust account run by a settlement administrator the attorneys general select. The states' executive committee has sole discretion over who receives money and how much; the attorneys general describe the recipients as consumers who received particularly risky loans. Credit Acceptance must turn over names, last known addresses and account numbers for the borrowers the states identify, and the administrator will notify those borrowers directly. No administrator, payment amount or distribution date has been announced.What It Means in Individual States
Several attorneys general published their state's share. New Jersey says its residents will receive more than $28.5 million, including about $2.2 million in restitution and $25.6 million in debt relief. Utah says 124 residents will share $177,935 in restitution plus about $1.6 million in debt relief, with $122,092 paid to the state. Connecticut says its residents are eligible for up to $2 million, and the state will receive $177,650.What Credit Acceptance Must Change
Most of the conduct terms run for seven years from when each is put in place. Among them:- An "off ramp" for new loans that fail quickly. For loans made after December 1, 2025 to borrowers in the highest-risk credit-score and payment-to-income bands, if the car is repossessed and sold within 12 or 18 months (depending on the band), Credit Acceptance must waive 95% of the remaining deficiency and may not sue the borrower or sell the debt. Credit Acceptance must offer this off ramp for five years starting November 2, 2026.
- A price cap. For buyers with a credit score below 600, the vehicle's selling price may not exceed 109% of its highest retail book value.
- Pricing checks. Credit Acceptance must block dealers from raising a car's price after it is tied to a financing application, take reasonable steps to stop dealers from charging more because a buyer finances or has weak credit, and audit dealers and investigate pricing complaints.
- Add-on protections. Buyers must sign a form before closing stating that service contracts and GAP coverage are optional and showing the payment with and without them, get a written reminder within 10 days, and be able to cancel through Credit Acceptance.
- Risk disclosures. Buyers with a credit score below 600 must be told how often similar borrowers fall behind and what nonpayment can lead to, and dealers must show buyers the car's retail book value before the contract is signed.
- Underwriting limits. Credit Acceptance must verify income and will not buy used-car contracts longer than 75 months, or the industry average plus 12 months if that is longer.
The company must also keep its existing ban on starter-interrupt devices and dealer GPS tracking, and file annual compliance reports with a monitoring committee for five years.
What Each Side Said
Maryland Attorney General Anthony G. Brown said the settlement "erases hundreds of millions of dollars in debt for borrowers struggling under loans that should never have been made."Credit Acceptance said the resolution "does not require material changes to the Company's operations," that the monetary terms are covered by amounts it had already accrued, and that the requirements are "broadly consistent" with its existing practices. Chief Executive Officer Vinayak Hegde said the agreement "provides certainty for our business, our dealer partners and the customers we serve."
Read the New York Consent Order
The proposed consent order and judgment filed September 17, 2026 in New York v. Credit Acceptance sets out the debt-relief definitions, the restitution terms and every conduct requirement described above. The multistate consent judgments filed by the other attorneys general carry the same core terms.What Happens Next
The settlement takes effect November 2, 2026, the deadline for Credit Acceptance to apply the debt relief. Except where the order sets another deadline, the monetary terms must be carried out within 90 days after that, and the company must report to the states within 120 days confirming the debt relief, credit-reporting and notice steps are done. Credit Acceptance must use reasonable best efforts to put the conduct changes in place within six months of the court's entry of the judgment.Credit Acceptance warns customers to be careful with unexpected letters, texts, emails or calls about "settlement money" and to follow only instructions they can verify. Eligible borrowers will hear directly from Credit Acceptance or the state-selected administrator. The company's settlement information page answers common account questions.
Questions
Do I need to file a claim to get Credit Acceptance settlement relief?
No. There is no claim form. Credit Acceptance must apply the debt relief itself on or before November 2, 2026 and notify each covered borrower by letter, email or text. Borrowers selected for a share of the $60 million restitution fund will be notified by a settlement administrator chosen by the attorneys general.
Should I stop making my Credit Acceptance car payments?
No. Credit Acceptance says the settlement does not change existing contracts and that customers should keep making scheduled payments unless the company contacts them directly with different instructions. The company says fewer than 3% of its open accounts are affected by the debt forgiveness.
Which Credit Acceptance loans qualify for debt relief?
The debt relief covers certain loans originated from November 1, 2015 through November 30, 2025 that were still open on December 1, 2025, where the borrower had a Credit Acceptance Score below 56 and a monthly payment equal to 13% or more of monthly income when the loan was made. Borrowers whose car was repossessed or surrendered and sold within 18 months of the loan have their remaining balance waived; for certain other qualifying borrowers who kept the car, the balance is waived and the lien released. Borrowers cannot see the internal score themselves, so Credit Acceptance decides and notifies who qualifies.
Will the Credit Acceptance settlement affect my credit report?
For accounts that receive the debt relief, Credit Acceptance must stop reporting data to the credit bureaus and ask the three major bureaus to delete the trade lines for those accounts. It also cannot sue those borrowers to collect, pursue other collection activity, or sell the accounts to a debt buyer.
Did Credit Acceptance admit wrongdoing?
No. Credit Acceptance denied the allegations and settled without admitting any fact, violation of law or liability. The attorneys general alleged it made auto loans it knew or should have known borrowers could not afford and encouraged dealers to pack loans with service contracts and GAP coverage; none of those allegations was adjudicated.
Sources
• Proposed Consent Order and Judgment, People of the State of New York v. Credit Acceptance Corporation, No. 1:23-cv-00038-JMF (S.D.N.Y.), filed September 17, 2026 (PDF).• Maryland Attorney General — Final Judgment and Consent Decree (PDF) and Complaint (PDF), with the September 17, 2026 announcement.
• New Jersey Attorney General announcement (September 17, 2026) and Final Consent Judgment (PDF).
• Connecticut Attorney General announcement (September 17, 2026).
• Utah Department of Commerce and Attorney General announcement (September 22, 2026).
• Credit Acceptance — "Credit Acceptance Reaches Resolution With State Attorneys General" (September 17, 2026) and its customer settlement page.
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Status
Settled — effective November 2, 2026; no admission of wrongdoing
Parties
New York and 40 other attorneys general v. Credit Acceptance Corporation
Case Title
People of the State of New York v. Credit Acceptance Corporation
Case Number
1:23-cv-00038-JMF
Court
U.S. District Court, Southern District of New York
Date Filed
January 2023
Official Website
Credit Acceptance Settlement Information
