Alaska joins $709.5M settlement with major subprime auto lender
Published 10:30 am Friday, September 18, 2026
Alaskans with certain vehicle loans through Credit Acceptance Corporation may qualify for debt relief or cash payments under a $709.5 million multistate settlement announced Thursday, Sept. 17.
Participating attorneys general accused the subprime auto lender of originating loans it knew or should have known borrowers could not afford. They also alleged that the company failed to prevent dealers from adding unwanted products to loan contracts.
Credit Acceptance, however, did not admit any fault or wrongdoing.
“This settlement gets relief directly back to the folks who were harmed,” acting Alaska Attorney General Cori Mills said in a prepared statement. “It shows how states can work together to protect consumers.”
Under the agreement, Credit Acceptance will provide $634 million in debt relief for certain high-risk loans made between Nov. 1, 2015, and Nov. 30, 2025. Another $60 million will fund cash payments for borrowers who received particularly risky loans. More than 55,000 borrowers nationally are expected to have debt forgiven, according to a statement from New York Attorney General Letitia James’ office.
Eligible borrowers do not need to apply. Credit Acceptance will notify candidates who qualify for debt relief, while a claims administrator will contact those eligible for cash payments. In Alaska, 44 borrowers are expected to recieve roughly $550,000 in debt relief, according to the Alaska Department of Law. Another 37 Alaskans are entitled to claim cash payments from approximately $53,000 set aside for borrwers in the state.
Notifications will not be sent until after the consent judegement takes effect Nov. 2, Department of Law information officer Sam Curtis told the Empire. Borrowers do not need to take action before they are contacted by Credit Acceptance or the settlement administrator.
According to the state, Credit Acceptance evaluates loans by predicting the percentage of each balance it is likely to collect. Attorneys general alleged that borrowers could not reasonably afford many of the company’s lowest-scoring loans, including some for which the lender predicted it would not recover the principal.
Many borrowers defaulted and lost their vehicles through repossession and auction, the state said.
Investigators also accused Credit Acceptance of allowing or encouraging dealers to include vehicle service contracts, guaranteed asset protection products, and other additions in financed amounts. Some borrowers were allegedly told the products were required or were not informed that the product had been added.
For certain loans made since December 2025 that quickly fall into default, Credit Acceptance must offer what the state described as an “off ramp.”
Qualifying borrowers will receive 95% debt relief, and the company will be prohibited from suing them to collect the remaining balance. Those provisions will remain in place for five years beginning Nov. 2. Additional requirements address disclosures about vehicle prices and optional products, loan-affordability protections, and oversight of participating dealers.
In its response, Credit Acceptance said the new requirements supplement existing controls and will not fundamentally change its business model. The company said it has served more than five million consumers who had limited or no access to conventional vehicle financing.
“This resolution provides certainty for our business, our dealer partners and the customers we serve,” CEO Vinyak Hedge said in a statement.
Thursday’s agreement resolves a multistate investigation that began in 2020 and litigation filed in federal court in 2023.
Federal regulators originally joined New York’s lawsuit, alleging deceptive and abusive lending practices. The Consumer Financial Protection Bureau withdrew from the case in April 2025.
Credit Acceptance will separately pay $15.5 million to participating attorneys general. Alaska is expected to receive approximately $106,650.
