New York Regulator Fines Santander Consumer, Orders Borrower Refunds In Fee Settlement
By CU Today Staff —
NEW YORK—New York’s top banking regulator has ordered Santander Consumer USA, the auto-finance arm of Spain-based Banco Santander, to pay more than $675,000 in penalties and consumer restitution after finding the company charged undisclosed fees tied to auto-loan extensions, Bloomberg Law reported.
The settlement announced by the New York State Department of Financial Services includes a $400,000 penalty and more than $275,000 in refunds to affected borrowers.
According to DFS, the investigation found that Santander Consumer USA displayed a single $25 extension fee in customer communications but in some cases charged borrowers multiple fees when processing loan extensions. The regulator said the practice affected New York consumers who paid extension fees between February 2016 and May 2017. Eligible borrowers will receive restitution under the agreement, Bloomberg Law reported.
Acting DFS Superintendent Adrienne Harris Asrow said the settlement addresses misleading fee disclosures and reinforces the agency’s focus on consumer protection. The regulator characterized the resolution as part of its efforts to ensure lenders clearly disclose costs associated with consumer financial products.
The action is the latest in a series of regulatory and legal challenges involving Santander Consumer USA’s auto-lending business. In 2020, Santander agreed to a multistate settlement valued at more than $550 million over allegations tied to subprime auto-lending and servicing practices, including claims involving loan extensions and consumer disclosures. The company has said in prior settlements that it has strengthened underwriting, servicing and risk-management practices in recent years.
Originally reported by CU Today.