Santander settles Massachusetts subprime auto loan case for $5.56 million

ByRichard C. Sloan

Feb 18, 2022

The Santander bank logo is seen at a branch in Mexico City, Mexico, April 12, 2019.REUTERS/Edgard Garrido

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  • Santander settles Massachusetts attorney general’s probe into subprime auto loans
  • More than 1,000 borrowers eligible for relief under settlement

(Reuters) – Subprime auto lender Santander Consumer USA Inc has agreed to pay $5.56 million to resolve claims by the Massachusetts attorney general that it failed to provide consumers with enough information about its collection practices of receivables.

Friday’s settlement with Massachusetts Attorney General Maura Healey came nearly two years after Santander reached a $550 million settlement over subprime auto loans with 33 states and the District of Columbia.

The settlement was the last between Santander and Massachusetts. In 2017, the company agreed to pay $25.9 million to resolve previous Massachusetts and Delaware investigations into its funding and securitization of subprime auto loans.

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The latest settlement, filed in Suffolk County Superior Court in Boston, covered conduct that occurred after November 2017. Santander did not admit wrongdoing.

In a statement, Santander said the deal was tied to a 2018 Massachusetts law change that affected it and other lenders and that it made adjustments in 2019 to comply with the law. law.

More than 1,000 Massachusetts borrowers are expected to be eligible for relief under the settlement, which also provides debt relief and credit repair, Healey said.

She alleged Santander failed to provide consumers with enough information about how any defaults left on their auto loans would be calculated after repossessing their cars.

“Consumers struggling with auto loan debt should get clear information from lenders to help them navigate repossession and other collection actions,” Healey, a Democrat, said in a statement.

In September, Healey reached a $27.2 million settlement with fellow subprime lender, Credit Acceptance Corp, over allegations that it misled investors and provided high-interest loans to borrowers. which he knew they would not be able to repay.

In July, Santander reached a $3.7 million settlement with Mississippi Attorney General Lynn Fitch, whose state sued Santander in 2017, alleging the subprime lender engaged in lending practices. misleading.

The case is Commonwealth of Massachusetts v. Santander Consumer USA Inc., Suffolk County Superior Court, No. 2284CV00377.

For Massachusetts: Glenn Kaplan of the Massachusetts Attorney General’s Office

For Santander: Christopher Pfirrman of Santander

(Editor’s note: This story has been updated with a comment from Santander.)

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Nathalie Raymond

Nate Raymond reports on federal judiciary and litigation. He can be reached at nate.raymond@thomsonreuters.com.