What the Original Lawsuit Alleged
Credit Acceptance Corporation is a major indirect lender that funds and services auto loans for subprime and deep-subprime borrowers, working through car dealerships rather than directly with consumers. In January 2023, the Consumer Financial Protection Bureau and New York Attorney General Letitia James jointly sued the company, alleging it engaged in deceptive and abusive practices, including misstating key loan terms like principal and interest amounts, and failing to disclose thousands of dollars in credit charges to borrowers.
According to the original complaint, while Credit Acceptance contracts in New York stated annual percentage rates of around 23 to 24 percent, the company allegedly charged more than 38 percent APR on average once undisclosed charges were factored in, and on numerous occasions more than 100 percent APR. The lawsuit covered roughly 1.9 million borrowers who obtained loans through the company between 2015 and 2021, including 4.9 billion dollars in loans in 2020 alone, and alleged that about 90 percent of the company loans included add-on products concealed from consumers.
The CFPB Withdrew in 2025
In a significant development, the CFPB filed a consent motion in April 2025 to withdraw as a plaintiff from the case, which the court granted. This did not end the litigation, but it narrowed the case considerably, since the CFPB withdrawal limits the case practical scope primarily to New York consumers, with the New York Attorney General office remaining as the sole plaintiff going forward.
This withdrawal reflected a broader shift in federal regulatory enforcement posture during this period, with the CFPB also dropping similar actions against other financial institutions around the same time. Credit Acceptance motion to dismiss the underlying claims remained pending in federal court even after the CFPB exit.
A Separate Securities Class Action for Investors
Beyond the consumer protection case, Credit Acceptance also faces a separate securities class action brought on behalf of investors, alleging the company made misleading statements about its business practices, including claims that it was packaging higher-risk loans into securitized pools without adequate disclosure, making loans to borrowers it knew could not repay them, and using aggressive and allegedly illegal debt collection tactics. Plaintiffs allege that when the CFPB and New York lawsuit became public in January 2023, the company stock price fell more than 11 percent in a single day, causing investor losses.
This securities case is a distinct legal matter from the consumer protection lawsuit, focused on what the company disclosed to shareholders rather than directly on the treatment of individual borrowers, though both cases arise from the same underlying allegations about the company lending practices.
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Credit Acceptance Class Action: The CFPB Withdrew, but New York Continues: Frequently Asked Questions
Answers to the most common questions about this case and your legal options.
What did the original Credit Acceptance lawsuit allege?
That the subprime auto lender misstated loan terms and concealed thousands of dollars in credit charges from borrowers, resulting in effective interest rates far exceeding disclosed rates, sometimes exceeding 100 percent APR, affecting roughly 1.9 million borrowers from 2015 to 2021.
Did the CFPB drop the case?
Yes. In April 2025 the CFPB filed a consent motion to withdraw as a plaintiff, which the court granted, narrowing the case largely to New York consumers with the New York Attorney General remaining as the sole plaintiff.
Is the lawsuit over?
No. The New York Attorney General case continues, and Credit Acceptance motion to dismiss the underlying claims remained pending in federal court even after the CFPB withdrawal.
Is there a separate investor lawsuit?
Yes. A securities class action alleges the company misled investors about its lending practices, contributing to an over 11 percent single-day stock price drop when the original CFPB and New York lawsuit became public in January 2023.
Why did the CFPB withdraw?
Public reporting attributed the withdrawal to a broader shift in federal regulatory enforcement posture during this period, with the CFPB dropping similar actions against other financial institutions around the same time.