True value of Credit Acceptance Corp.’s loans ‘obscured’, regulators say

Southfield-based Loan Acceptance Corporation, which offers car loans to people with bad credit and otherwise ineligible for auto loans, has been accused by regulators of making predatory deals that set up financially vulnerable buyers.

According to the complaint filed Wednesday, auto loans for used cars are “charged with exorbitant interest rates, expensive add-ons and saddle borrowers with debt” that even lenders believe borrowers cannot repay in full.

New York Attorney General Letitia James and the Consumer Financial Protection Bureau jointly sued the Credit Union Corporation on Wednesday for defrauding thousands of low-income New Yorkers out of high-interest auto loans.

Additional products that are financed and increase borrowing costs include a vehicle service contract that promises to repair or replace certain parts, and a guaranteed asset protection product, or “GAP,” to pay off borrowers’ debt after insurance payments. when a used car or truck is stolen or lost in an accident.

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