Attorney General Jeff Jackson Reaches $694 Million Settlement Over Predatory Auto Loans

FOR IMMEDIATE RELEASE
Thursday, Sept. 17, 2026
Contact: comms@ncdoj.gov
919-538-2809

RALEIGH — Attorney General Jeff Jackson and a bipartisan coalition of attorneys general reached a $694 million settlement over predatory lending practices with Credit Acceptance Corporation (CAC), one of the country’s largest auto finance companies. The settlement includes about $7.5 million in debt relief and $2 million in restitution to North Carolinians and prevents the company from extending predatory loans in the future.

“This company preyed on vulnerable North Carolinians by convincing them to take out car loans they couldn’t afford,” said Attorney General Jeff Jackson. “We’re getting money back for a lot of those customers, and we’re making sure that they can’t harm other people in this way again.”

The lawsuit alleged that CAC, which gives car loans to consumers with limited or poor credit, made money by targeting low-income and high-risk borrowers with high-interest loans the company knew they couldn’t afford. It misled consumers about the true costs of the loans and used aggressive debt-collection tactics when borrowers defaulted on their loans.

Specifically, CAC scored each of its loans based on how much the company predicted it would collect on them. Consumers could not afford many of the low-scored loans – in some cases, they couldn’t even pay back the principal amount. Many people who took out low-scored loans ended up defaulting and then lost their cars.

The settlement includes $60 million in restitution for consumers who got particularly risky loans. Of that, nearly $2 million will go to about 1,300 North Carolina consumers, with an average of about $1,435 going to each consumer. For certain risky loans made between Nov. 1, 2015, and Nov. 30, 2025, the company will provide $246 million in debt relief to consumers who have not had their cars repossessed and $388 million in debt relief to consumers who have had their cars repossessed. The company will provide roughly $7.5 million in debt relief to North Carolina consumers.

Consumers who are eligible for restitution will be notified by a claims administrator, and consumers who are eligible for debt relief will be notified by the company.

In addition to the restitution and debt relief, the settlement requires CAC to:

Provide consumers who have certain risky CAC loans made starting in December 2025 with “off ramps” for loans that fail quickly. Qualifying consumers will get 95% debt relief, and the company cannot file collections lawsuits against them. CAC must provide these off ramps for a five-year period starting in November.

Prevent unlawful Vehicle Service Contracts and Guaranteed Asset Products from being packed into a loan, including by requiring pre-purchase disclosures, a post-purchase process alerting consumers about the purchase and allowing easier product cancellation, and dealer monitoring.

Provide consumers with pre-loan disclosures about the risks of defaulting on the loan and value of the vehicle.

Institute a cap for vehicle prices at 109% of retail book value for certain customers for seven years.

Implement processes to prevent dealers from raising car prices due to credit worthiness or above advertised prices.

Attorney General Jackson is joined in reaching this settlement by the attorneys general of Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Hawaii, Illinois, Indiana, Kentucky, Louisiana, Maine, Maryland, Michigan, Minnesota, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Utah, Vermont, Virginia, Washington, and Wisconsin.

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