Colorado announces settlement with auto lender

State Issues Colorado Debt Collection

On September 10, the Colorado attorney general announced a settlement with a Texas-based auto lender (defendant) resolving allegations of lending practices that allegedly exposed consumers to unnecessarily high levels of risk and knowingly placed consumers into auto loans with a high probability of default, which violated Colorado’s consumer protection laws, among other things. Under the terms of the assurance of discontinuance, the defendant must amend its origination and collection practices, including by, among other things: (i) rescinding consumers’ debt on certain loans; (ii) attempting to repurchase any loans that may be held by third parties; and (iii) setting a reasonable debt-to-income threshold to ensure that the defendant is reasonably evaluating a consumer’s ability to pay.