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Case Status:    SETTLED
On or around 12/16/2022 (Date of order of final judgment)

Filing Date: October 02, 2020

According to the Complaint, Credit Acceptance Corporation is a subprime auto finance company providing loans and other related financial products that enable automobile dealers to sell vehicles to consumers. In 2019, Credit Acceptance funded about 370,000 auto loans nation-wide of which over 95% were subprime loans. A substantial portion of Credit Acceptance’s loans are never repaid. The Company also securitizes and sells its loans to investors.

The Complaint alleges that during the Class Period, Defendants made materially false and/or misleading statements and failed to disclose material adverse facts about the Company’s business, operations, and adherence to the appropriate laws and regulations. Specifically, the Complaint alleges Defendants failed to disclose to investors: (i) that the Company was topping off the pools of loans that they packaged and securitized with higher-risk loans; (ii) that Credit Acceptance was making high-interest subprime auto loans to borrowers that the Company knew borrowers would be unable to repay; (iii) that the borrowers were subject to hidden finance charges, resulting in loans exceeding the usury rate ceiling mandated by state law; (iv) that Credit Acceptance took excessive and illegal measures to collect debt from defaulted borrowers; (v) that, as a result, the Company was likely to face regulatory scrutiny and possible penalties from various regulators or lawsuits; and (vi) that, as a result of the foregoing, Defendant’s positive statements about the Company’s business, operations, and adherence to appropriate laws and regulations were materially misleading and/or lacked a reasonable basis.

On May 28, 2021, the Court issued an Order appointing Lead Plaintiff and Counsel. Lead Plaintiff filed an amended Complaint on July 22.

On August 24, 2022, the parties entered into a Stipulation and Agreement of Settlement. On September 19, the Court granted preliminary approval of the Settlement. On December 16, the Court granted final approval of the Settlement, including an award of Attorneys’ Fees and Expenses, and entered Final Judgment.

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