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Former Metro Times staff writer Ryan Felton sees his byline in his alma mater this week as a Detroit story for his current employer, Jalopnik. is republished at Metro Times. It tells how one subprime auto lender, Credit Acceptance Corp., turned loans for used cars into big profits -- not just for the company, but for the 36th District Court's civil-case docket:
In 2017, one out of every eight civil lawsuits filed in Detroit's 36th District Court, the largest district court in the state of Michigan, was a collection case brought by Credit Acceptance, according to an analysis of publicly available court records by Jalopnik. Credit Acceptance alone — a company meant to service subprime car loans under the cheerful motto of "We change lives!" — absolutely dominates the civil case volume of one of the country's busiest courts.
This for a company that admits it repossesses more than a third of the cars it finances. Also:
Debt collectors retained by the company chase after defaulted buyers for as long as 20 to 25 years, garnishing their wages and recouping sums that sometimes exceed two times the original loan amount.
The implications of that enormous caseload in Detroit are dark. Court cases generate fees. Fees support the court. Which means the 36th District Court may well depend on one company's aggressive legal tactics against low-income Detroiters for its financial health. (This is the argument that some have made against the Wayne County Treasurer's office, which has been financially buoyed by foreclosure filings since the financial crisis.)
To put it bluntly:
Records show Credit Acceptance started filing more debt collection suits each year against Detroit residents. In 2007, the lender represented 1.45 percent of the 36th District Court's total caseload. Five years later, it jumped to 5.21 percent. By last year, it reached 12.18 percent.
It's a potentially startling reality for a court that, just five years ago, nearly became insolvent. The court that year posted an operating deficit of $4.5 million, leaving it facing "extraordinary challenges," a report found. . . .
The court is in better financial shape today, and it still handles one of the largest case volumes in the U.S. — including a significant amount of filings from Credit Acceptance. Talbot had no comment when asked about Jalopnik's findings and the implication that fees from the lender's cases are helping 36th District stay afloat.
It's a long story, and well worth the read.
