Microhip shortage hits subprime lender’s credit acceptance as auto loan volumes plummet

In its filing disclosing the decline in loan volumes, Credit Acceptance executives noted that the company, “in disclosing this information regarding the monthly volume of consumer loan allocation units, does not recognize any obligation to have done so and undertakes no obligation to disclose information on the volume of loan allocation units in the future. “

The external disputes that impact the lender arise amid growing problems that have placed the company in the crosshairs of regulators, politicians and activist investors for at least a year.

In late April, the company simultaneously announced that its longtime CEO Brett Roberts would be retiring, which he did for “personal reasons,” and that the company had reached a $ 27 million settlement with the Massachusetts Attorney General linked to alleged deceptive lending practices.

In recent months, notable short sellers such as Steve Eisman and Andrew Left have taken positions betting against the company’s stock price, citing expected regulatory crackdowns related to the company’s alleged business practices. These include high interest rates, hidden fees and repossession more than a third vehicles it finances.

While acknowledging some of the issues that plagued credit acceptance, Buckingham and JD Power said he saw them as separate from the drop in lending volume disclosed on Wednesday.

The analyst said his company still compiles total car loan data for May, but based on recent trends, he expects the same dynamics to impact Credit Acceptance’s competitors in the industry. subprime space.

“I tend to think it will be a model,” Buckingham said. “I don’t think they’re going to be an outlier.”

– Automotive News contributed to this report


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