Dealer F&I provider Credit Acceptance Corp (CAC) has been ordered by the Securities and Exchange Commission to restate its financial results, dating back potentially to 1992 when the company went public.
Based in Southfield, MI, CAC announced in conjunction with the SEC order that it had ceased relationships with its auditor since 1998, Deloitte & Touche LLP.
CAC delayed reporting 2004 financial results, a move that resulted in a NASDAQ stock exchange de-listing. But a spokesman says, “We're still in business and working with dealers.”
Deloitte & Touche had refused to sign off on CAC's 2004 financial results, the lender said, unless accounting methods were changed, even though the accounting firm had approved previous financial returns for the past six years. The federal commission agreed with the auditing firm that a change in procedures was warranted.
Prompting the flap: CAC authorizes loans through dealer “partners” regardless of applicants' credit histories. The loans are assigned to CAC, and dealers receive advance sums or reserves for origination.
CAC ran into problems with the commission over classifying itself as a loan “originator.” The agency wanted the firm classified as a loan-service “provider.”
CAC says that “while costly and time-consuming,” the required revisions probably will “improve our ability to communicate clearly the company's performance to shareholders.”