For immediate release -Thursday, December 1, 2005
Contact Bob Brammer - 515-281-6699.
Auto Receivables Trust Agrees to Better Loan Terms for
Dan Nelson Customers
Auto Receivables Trust is providing a lower interest rate, $500 off the amount owed, and continued aid to consumers
with non-maintenance repairs.
DES MOINES. Iowa Attorney General Tom Miller announced today that "Auto Receivables Trust" has agreed to significantly improve the interest
rate and other terms of Dan Nelson consumer auto loans that the Trust bought from Nelson's financing company, South Dakota
Acceptance Corporation, also known as Car Now Acceptance Company, or CNAC. The Trust purchased the loans from
CNAC, and the loans are being serviced by EMCC, Inc.
Miller said the agreement
between his office and the Trust will provide better loan terms to
about 250 consumers whose auto loans were purchased by the Trust from
Dan Nelson's financing company. The improved terms of consumers' loans
will be applied automatically. The loans were originated at Nelson dealerships
located in Des Moines, Council Bluffs and Sioux City.
"We appreciate the Trust's cooperation in providing better terms for consumers," Miller said.
The Trust's Dan Nelson customers serviced by EMCC, Inc., will benefit in several ways under the agreement:
- The annual interest
rate on loans will be cut to 17.95%. (Almost all now are at 24.95%.)
- The principal amount
owed will be reduced by $500 at the end of consumers' loans. (When consumers
reach the last $500 in principal owed, their loans will be satisfied
and the lien will be released.)
- EMCC, Inc., will
continue its current practice of aiding consumers with non-maintenance
repairs to vehicles on a case-by-case basis.
- All active contracts
serviced by EMCC, Inc., will be deemed current. Even if consumers haven't
made payments for months, they won't have to pay late fees or past-due
"This will provide significant relief and savings to consumers," Miller said. The agreement applies to vehicles purchased in Iowa,
regardless of the buyer's state of residence. South Dakota is expected to conclude a similar agreement on behalf of its consumers.
"Our office will continue to work with other financial institutions that now own loans originated by the Dan Nelson companies, to
seek improved loan terms for consumers," Miller said.
The Trust is based in New York, and EMCC, Inc., is based in Pembroke, Mass.
A similar agreement was reached with FSB Financial, Ltd., in September, benefiting about 1100 consumers. Before that,
MetaBank agreed to provide improved loan terms to about 1400 customers as well.
Information for consumers:
Consumers do not need to take any steps to participate in the agreement, and the agreement does not take away any private legal
rights or remedies of consumers. The terms of consumers' loans will be changed automatically, and a letter is being issued to them
with detailed information about the agreement. Consumers will continue making the same payment amount at the same location, but
the interest rate reduction and $500 credit will reduce consumers' total payments and shorten the length of loans.
Consumers with questions about the agreement with the Trust may call EMCC, Inc., at 1-866-523-4455. Consumers also may
call the Iowa Consumer Protection Division at 888-777-4590 (toll-free) or 515-281-5926. Consumers also may write to the
Iowa Consumer Protection Division, 1305 E. Walnut St., Des Moines, Iowa 50319, or send e-mail to firstname.lastname@example.org .
The Attorney General's web site is www.IowaAttorneyGeneral.org.
In January, Miller's office sued Dan Nelson Automotive Group, its financing company South Dakota Acceptance Corporation, and
business partners Dan Nelson and Chris Tapken. The lawsuit, filed in Polk County District Court, alleged that the defendants
engaged in violations of Iowa consumer fraud and consumer credit laws, and engaged in ongoing criminal conduct in connection
with their sales of used motor vehicles in the three cities. (Neither the Trust nor EMCC, Inc., is a defendant in the suit.)
The agreement with the Trust does not affect Iowa's consumer fraud lawsuit, which remains pending. "We alleged in our lawsuit
that the defendants substantially harmed consumers," Miller said. "They are out of business now, but they still need to be held
accountable for the alleged violations."
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