Arkansas has joined a multistate settlement requiring Credit Acceptance Corporation to provide hundreds of millions of dollars in debt relief and cash payments over allegations that the subprime auto lender steered financially vulnerable borrowers into unaffordable loans. Attorney General Tim Griffin’s office announced Arkansas’s participation in the $694 million agreement on Sept. 17.
The settlement reaches beyond a one-time payment. Credit Acceptance will erase more than $630 million in outstanding balances for over 55,000 borrowers nationwide, place $60 million into a restitution fund for other affected consumers, and pay $15.5 million to participating jurisdictions, according to the state coalition. Arkansas borrowers who qualify are expected to receive relief through the settlement administrator rather than by filing a new lawsuit individually.
Regulators alleged that Credit Acceptance worked with dealers to put borrowers with low or limited credit histories into loans carrying costs they could not sustain. The coalition said the average loan examined carried an annual interest rate above 38 percent, while some exceeded 100 percent. It also alleged that consumers were sold service contracts, insurance and other add-ons they did not need or did not understand they had purchased. Nearly half of the affected customers had a vehicle repossessed during the life of the loan, the coalition said.
The company did not admit wrongdoing. In its statement, Credit Acceptance said the consent judgments resolve litigation filed in 2023 and a multistate investigation begun in 2020. Chief Executive Vinayak Hegde called the terms constructive and consistent with regulatory expectations, and the company said the agreement would not require charges beyond amounts already accrued.
For Arkansas consumers, the practical effect depends on whether their account falls within the settlement’s eligibility rules. The company must waive all remaining balances for certain customers. Separately, borrowers whose vehicles were repossessed soon after entering qualifying loans may receive cash restitution. The participating attorneys general will administer that fund, and consumers should be cautious about anyone demanding an upfront fee to obtain settlement benefits.
The judgment also changes how the lender must operate. Credit Acceptance must give advance warnings when a loan presents a historically high risk of default. If specified at-risk borrowers default within 12 or 18 months and their vehicles are repossessed, the company must forgive 95 percent of the remaining debt and may not sue over or resell the balance. It must also contact buyers outside the dealership to disclose add-on products and explain how to cancel them while keeping the vehicle.
The settlement closes a case originally brought by New York and the federal Consumer Financial Protection Bureau. The CFPB withdrew in 2025, while state officials continued the litigation. Reuters reported that the final agreement covers 40 states and the District of Columbia. Arkansas’s participation gives affected residents access to the same debt-relief structure and future lending safeguards.
