Attorney General Rayfield Delivers Win for Oregon Drivers Trapped in Predatory Auto Loans

Attorney General Dan Rayfield announced a settlement with Credit Acceptance Corporation (CAC), one of the nation's largest subprime auto lenders, that will deliver $694 million in cash and debt relief to consumers nationwide. Oregon worked with attorneys general from 40 other states on the settlement, and Oregonians and the state will receive just over $754,000.

"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," said Attorney General Rayfield. "For struggling consumers, these kinds of loans can become a debt trap that is almost impossible to escape."

CAC is one of the nation's largest auto finance companies, providing car loans to consumers with limited or impaired credit histories. In addition to the financial agreement, the settlement includes injunctive terms that, among other things, require CAC to provide consumers disclosures about loan risks, give consumers protections from bad outcomes from certain risky CAC loans, and help guard consumers from dealers "packing" CAC auto-loan contracts with unwanted Vehicle Service Contracts (VSC) and Guaranteed Asset Protection (GAP) products.

The multistate investigation resolves allegations that CAC originated loans that the company knew or should have known consumers could not afford. CAC gives a proprietary "score" to each of its loans representing its prediction of the percentage amount CAC will collect on the loan from all sources. The attorneys general allege that consumers could not reasonably afford many of CAC's low "score" loans, including those where CAC predicted the consumer would not pay back even the loan's principal 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, which will be effective as of November 2, 2026, also resolves allegations that CAC encouraged and failed to reasonably prevent unlawful VSC and GAP product "packing" by auto dealers in CAC's network. The attorneys general allege that CAC's dealer compensation methodology and lack of reasonable dealer oversight resulted in dealers aggressively selling VSCs and GAP products in connection with CAC loans when consumers were either unaware they were purchasing the products or were led to believe the products had to be purchased for the consumer to get financing.

Oregon's share of the settlement includes:

• $548,431 in consumer debt relief for 58 Oregonians;
• $96,142.35 in consumer restitution for 67 Oregonians; and
• $109,772.03 to the State.

The settlement provides $60 million in cash restitution that will be distributed to consumers to whom CAC gave particularly risky loans. For certain risky CAC loans made between November 1, 2015, and November 30, 2025, CAC is also required to provide, on or before November 2, 2026, $388 million in debt relief to consumers whose cars have been repossessed, and $246 million in debt relief to consumers whose cars have not been repossessed, allowing those consumers to keep their cars. CAC must also pay an additional $15 million to the attorneys general. The settlement's injunctive terms include the following long- and short-term requirements designed to meaningfully reform the company's lending practices:

• For consumers with certain risky CAC loans that CAC made starting in December 2025, CAC will 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 November 2, 2026.
• The settlement mandates a process to prevent unlawful VSC and GAP product packing, including enhanced pre-purchase disclosures, a post-purchase process alerting consumers about the purchase(s) and allowing easier product cancellation, and dealer monitoring.
• CAC must provide consumers with pre-loan disclosures about the risks of default and the value of the vehicle.
• For seven years, CAC must institute a price cap for vehicle prices at 109% of retail book value for certain consumers.
• CAC must implement processes to prevent dealers from raising car prices due to creditworthiness or above advertised prices.

Customers eligible for debt relief will be notified by CAC. Consumers eligible for restitution will be notified by a claims administrator.
Alongside Attorney General Rayfield in the settlement are the attorneys general of Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, the District of Columbia, Florida, Georgia, Hawaiʻi, Illinois, Indiana, Kentucky, Louisiana, Maine, Michigan, Minnesota, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Utah, Vermont, Virginia, Washington, and Wisconsin. New York is concurrently settling litigation it brought against CAC in the Southern District of New York.