Greedy subprime auto lending giant Santander is settling charges filed by 33 state Attorneys General and the District of Columbia, by paying $550 million.
The law enforcement officials charged Santander with engaging in predatory auto lending practices, including:
- Approving auto loans Santander knew low-income car buyers could not possibly repay, resulting in an astronomical and devastating default rate of over 70%
- Turning a blind eye to common scams that auto dealers engage in, such as falsifying loan applications to make it appear the used car buyers had far more income than they really had
“Santander profited by approving high-cost loans to disadvantaged auto buyers who were doomed from the start,” said California Attorney General Xavier Becerra in a statement.
As part of the settlement, Santander will provide over $99 million in relief to thousands of California consumers who Santander approved for its abusive high-cost loans.
Consumers with the lowest quality loans who had defaulted as of December 31, 2019, and have not had their cars repossessed, will be allowed to keep their car and have any deficiency balance on the loan (up to a total value of $45 million in deficiency waivers nationwide) waived.
Santander will also waive the deficiency balances for certain defaulted consumers across the country, with approximately $433 million in immediate forgiveness of loans still owned by Santander, and additional deficiency waivers of loans that Santander no longer owns but is required to attempt to buy back.
When consumers default on auto loans, lenders like Santander swoop in and repossess their vehicles, often causing them to lose their jobs. When car buyers lose their only way to get to work, some become homeless. In states like California with huge areas that provide little access to public transportation, losing a vehicle can be a death sentence, particularly for people who are elderly or disabled, or live in rural areas or other parts of the state where they are unable to access health care without a car.
Did you have an auto loan with Santander? Or was your vehicle repossessed by Santander? We’re very interested in hearing from you. Please contact CARS, so we can listen to your story and help prevent more people from falling prey to scummy subprime auto lenders.
Attorney General Becerra Announces Over $550 Million Settlement Against Nation’s Largest Subprime Auto Financing Company for Deceptive Auto Loan Practices
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