(The Center Square) – The Consumer Financial Protection Bureau is backing off a lawsuit against a Michigan-based auto lender in a move that the American Financial Services Association said was good news for those struggling to get car loans.
“Continued pursuit of this action would have limited the availability of auto financing and deprived those most in need of financing from being able to acquire the cars they need to get to school and work,” AFSA President-elect Celia Winslow said.
The Consumer Financial Protection Bureau, or CFPB, initially filed suit in 2023 alongside the New York State Office of the Attorney General against Credit Acceptance, alleging the company was tricking customers into high-cost loans on used cars. The joint lawsuit further alleged that Credit Acceptance hid costs in loan agreements and set consumers up to fail. The joint lawsuit sought to force Credit Acceptance to change practices, reimburse consumers, pay back wrongfully earned gains and pay a penalty.
Credit Acceptance has a pending motion to dismiss the case entirely. The lender has denied wrongdoing.
“We are pleased with the CFPB’s decision to withdraw from this case, which we believe never should have been brought in the first place,” said Erin Kerber, Credit Acceptance’s chief legal officer. “We are proud to have provided over five million people with the opportunity to own a vehicle through our network of dealers. We look forward to millions more consumers having such an opportunity and remain committed to operating with integrity and in compliance with all applicable laws.”
Credit Acceptance said it expects that if the CFPB’s motion is granted, the NYAG would be the sole remaining plaintiff and the case would be limited to New York consumers only.
CFPB didn’t immediately respond to a request from The Center Square for comment on its decision to withdraw from the case.
