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MINNEAPOLIMEDIA NEWS | Minnesota Auto Borrowers to Receive $8.5 Million in Relief Under Subprime Lending Settlement
SAINT PAUL, MN (September 21, 2026). Minnesota consumers are expected to receive more than $8.5 million in debt relief and refunds through a multistate settlement with Credit Acceptance Corporation over allegations that the subprime auto lender placed borrowers into unaffordable loans and financed add-on products without their informed consent.
Attorney General Keith Ellison and a bipartisan coalition of 41 state attorneys general reached the agreement with the company.
Nationally, Credit Acceptance Corporation will pay $75.5 million to participating states and forgive more than $630 million in consumer debt.
Minnesotans are expected to receive more than $7.5 million in debt cancellation and an additional $1 million or more in refunds. Eligible consumers will be contacted directly and do not need to submit claims or pay anyone to receive relief, according to the Attorney General’s Office.
The agreement resolves allegations rather than a trial verdict determining liability.
Loans Allegedly Structured Around Expected Failure
Minnesota’s lawsuit alleged that Credit Acceptance Corporation financed vehicle loans it knew or should have known many consumers could not afford.
According to the state, the company projected how much money it expected to collect from each borrower when deciding whether a loan would be profitable. Some loans were allegedly expected to produce less in payments than the original principal.
The state contended that the loans could nevertheless remain profitable because the company collected payments for a period, repossessed the vehicle after default and then allowed the vehicle to be sold again.
Ellison described that process as a cycle in which borrowers were placed into expensive loans, lost their vehicles and could remain responsible for additional debt.
The lawsuit also alleged that some borrowers were charged for optional products, including vehicle-service contracts and Guaranteed Asset Protection coverage, without adequately understanding or authorizing the purchases.
Settlement Changes Lending Rules
The agreement requires Credit Acceptance Corporation to change how it handles loans carrying a historically high risk of default.
The company must disclose that risk to consumers before they accept qualifying loans. If a borrower accepts such a loan and defaults within the first 12 or 18 months, depending on the loan’s risk category, the company must waive 95 percent of the remaining balance.
The company also may not file collection lawsuits against consumers covered by that provision.
Additional requirements are intended to prevent automobile dealers from adding optional products without clear consent. The reforms include stronger disclosures at the time of sale and notices after the transaction that allow consumers to identify and cancel unauthorized products.
Why the Settlement Matters
Vehicles are essential for many Minnesota workers, particularly in communities where public transportation is limited. Borrowers with poor or limited credit frequently pay higher interest rates and may have fewer lenders willing to finance a purchase.
Those conditions can leave consumers vulnerable to contracts with high payments, lengthy repayment periods and additional products that substantially increase the total cost.
The settlement does not invalidate every Credit Acceptance loan or guarantee payments to every customer. Relief will depend on the eligibility terms contained in the agreement.
The Minnesota Attorney General’s Office said consumers with complaints about automobile dealers or financing companies may contact it at 651-296-3353 in the Twin Cities, 800-657-3787 elsewhere in Minnesota or through its online complaint system.
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