CACC - Credit Acceptance stock turns negative after getting hit with CFPB lawsuit

• Credit Acceptance ( NASDAQ: CACC ) stock erased gains and dropped 6.8% in Tuesday afternoon trading after New York Attorney General Letitia James and the Consumer Financial Protection Bureau sued the subprime auto lender for allegedly tricking tens of thousands of low-income New Yorkers into adopting unaffordable, high-interest car loans .
• “CAC claimed to help low-income New Yorkers purchase cars, but instead, drove them straight into debt,” James said in a statement.
• The lawsuit alleged that the company misstated key terms on loan agreements, such as principal and interest amounts, and failed to disclose thousands of dollars in credit charges. Furthermore, it "packaged these illegal loans into securities that it sold to investors."
• An investigation conducted by the Office of the Attorney General found that Credit Acceptance ( CACC ) pushed borrowers into buying autos that were worth less than their loans, leading many borrowers "to lose their vehicles through repossession, while still owing thousands of dollars on the loans."
• Previously, (Dec. 28, 2022) Banks lose market share in auto lending as credit unions offer lower rates .

For further details see: