DOB: Santander Consumer USA - CO

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IN THE MATTER OF:

SANTANDER CONSUMER USA INC
d/b/a DRIVE FINANCIAL
d/b/a CHRYSLER CAPITAL
d/b/a SANTANDER AUTO FINANCE
NMLS # 4239

       ("Santander")
   
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        CONSENT ORDER        

WHEREAS, the Banking Commissioner (“Commissioner”) is charged with the administration of Part II of Chapter 668, Sections 36a-535 to 36a-547, inclusive, of the Connecticut General Statutes, “Finance Companies”;

WHEREAS, Santander is an Illinois company with a main office at 1601 Elm Street, Suite 800, Dallas, Texas, and three branch offices, respectively located at 1550 West Southern Avenue, Mesa, Arizona; 12300 East Arapahoe Road, Centennial, Colorado; and 5201 Rufe Snow Drive, Suite 100, North Richland Hills, Texas;

WHEREAS, Santander is currently licensed as a sales finance company under Part II of Chapter 668, Sections 36a-535, et seq., of the Connecticut General Statutes;

WHEREAS, the Commissioner, through the Consumer Credit Division of the Department of Banking (“Department”), conducted an examination between August 5, 2016 and October 24, 2016, pursuant to Section 36a-17 of the Connecticut General Statutes into the activities of Santander to determine if it had violated, was violating or was about to violate the provisions of the Connecticut General Statutes within the jurisdiction of the Commissioner (“2016 Examination”);

WHEREAS, the 2016 Examination resulted in a Report of Examination sent to Santander by letter dated January 19, 2017, which Santander responded to by letters dated March 20 and April 28, 2017;

WHEREAS, as a result of the 2016 Examination, the Commissioner alleges that Santander failed to accurately calculate the deficiency balances on repossessed motor vehicles, in violation of Section 36a-785(g) of the Connecticut General Statutes and Section 36a-785(g) of the Connecticut General Statutes, as amended by Public Act 16-65;

WHEREAS, as a result of the 2016 Examination, the Commissioner alleges that Santander failed to provide retail buyers with written statements itemizing the disposition of the proceeds of repossessed motor vehicles within thirty (30) days of such sale, in violation of Section 36a-785(e) of the Connecticut General Statutes and Section 36a-785(e) of the Connecticut General Statutes, as amended by Public Act 16-65;

WHEREAS, the Commissioner alleges that the aforementioned violations were similar to those that Santander was cited for as a result of a prior examination conducted in December 2011 (“2011 Examination”);

WHEREAS, as a result of the 2011 Examination, Santander reviewed its portfolio of Connecticut accounts and waived approximately $11,406,153 in deficiency balance from 1,424 retail buyer accounts;

WHEREAS, after the 2011 Examination, Santander represented to the Commissioner that it would update its policies and procedures and ensure that the aforementioned violations would not occur again;

WHEREAS, the policies and procedures Santander implemented after the 2011 Examination failed to prevent the reoccurrence of violations of Part II of Chapter 668, Sections 36a-535 et seq., of the Connecticut General Statutes;

WHEREAS, the Commissioner also alleges that Santander improperly charged “convenience fees” to retail buyers for payments made by credit card or debit card from October 1, 2016 through January 19, 2017, in violation of Section 36a-778 of the Connecticut General Statutes, as amended by Public Act 16 65;

WHEREAS, as a result of the 2016 Examination, Santander credited, refunded or waived $2,912,102.55 in principal, interest and other fees or assessments, including impermissible “convenience fees”, from 3,730 accounts in its Connecticut portfolio, and provided evidence of such to the Commissioner;

WHEREAS, as a result of the 2016 Examination, Santander represents to the Commissioner that it has updated its policies and procedures to ensure that its deficiency letters are sent within the timeframe established by Section 36a-785(e) of the Connecticut General Statutes;

WHEREAS, Santander represents to the Commissioner that it has ceased charging the aforementioned convenience fees on or about January 19, 2017, and represents to the Commissioner that it will not charge such fees so long as they are prohibited by Section 36a-778 of the Connecticut General Statutes;

WHEREAS, Santander was cooperative and complied with the Department’s requests for information or instructions during both the 2011 Examination, 2016 Examination, and up to the issuance of this Consent Order;

WHEREAS, despite Santander’s cooperation, the Commissioner believes that the foregoing allegations would support the initiation of administrative proceedings against Santander, including, without limitation, proceedings to issue a cease and desist order pursuant to Section 36a-543(d) of the Connecticut General Statutes and Section 36a-52(a) of the Connecticut General Statutes, as amended by Public Act 17-233, and impose a civil penalty pursuant to Section 36a-543(d) of the Connecticut General Statutes and Section 36a-50(a) of the Connecticut General Statutes, as amended by Public Act 17-233;

WHEREAS, initiation of such proceedings would constitute a “contested case” within the meaning of Section 4-166(4) of the Connecticut General Statutes;

WHEREAS, Section 4-177(c) of the Connecticut General Statutes and Section 36a-1-55(a) of the Regulations of Connecticut State Agencies provide that a contested case may be resolved by consent order, unless precluded by law;

WHEREAS, both the Commissioner and Santander acknowledge the possible consequences of formal administrative proceedings, and Santander voluntarily agrees to consent to the entry of the sanctions imposed below without admitting or denying any allegation set forth herein and solely for the purpose of obviating the need for formal administrative proceedings concerning the allegations set forth herein;

WHEREAS, Santander specifically assures the Commissioner that the violations described herein shall not occur in the future;

WHEREAS, Santander acknowledges that this Consent Order is a public record and is a reportable event for purposes of the regulatory disclosure questions on the Nationwide Multistate Licensing System and Registry (“NMLS”), as applicable;

AND WHEREAS, Santander, through its execution of this Consent Order, voluntarily agrees to waive its procedural rights, including a right to a notice and an opportunity for a hearing as it pertains to the allegations set forth herein, and voluntarily waives its right to seek judicial review or otherwise challenge or contest the validity of this Consent Order.


CONSENT TO ENTRY OF SANCTIONS

WHEREAS, Santander, through its execution of this Consent Order, consents to the Commissioner’s entry of a Consent Order imposing the following sanctions:

1. No later than the date this Consent Order is executed by Santander, it shall remit to the Department of Banking by wire transfer or cashier’s check, certified check or money order made payable to “Treasurer, State of Connecticut”, the sum of One Hundred Thousand Dollars ($100,000) as a civil penalty; and
2. Santander shall not violate Part II of Chapter 668, Sections 36a-535 to 36a-547, inclusive, of the Connecticut General Statutes or any other statute or regulation under the jurisdiction of the Commissioner, including, specifically, Section 36a-785(e), 36a-785(g) or 36a-778 of the Connecticut General Statutes.


CONSENT ORDER

NOW THEREFORE, the Commissioner enters the following:

1. The Sanctions set forth above be and are hereby entered;
2. Upon issuance of this Consent Order by the Commissioner, this matter will be resolved and the Commissioner will not take any future enforcement action against Santander based upon the allegations set forth herein; provided that issuance of this Consent Order is without prejudice to the right of the Commissioner to take enforcement action against Santander based upon a violation of this Consent Order or the matters underlying its entry, if the Commissioner determines that compliance with the terms herein is not being observed or if any representation made by Santander and reflected herein is subsequently discovered to be untrue;
3. Santander shall not take any action or make or permit any public statement, including in regulatory filings or otherwise, denying, directly or indirectly, any allegation referenced in this Consent Order or create the impression that this Consent Order is without factual basis;
4. Subject to the foregoing, and so long as this Consent Order is promptly disclosed by Santander and its control persons on NMLS, as applicable, nothing in the issuance of this Consent Order shall adversely affect the ability of Santander to apply for or obtain licenses or renewal licenses under Part II of Chapter 668, Sections 36a-535 to 36a-547, inclusive, of the Connecticut General Statutes, provided all legal requirements for such licenses are satisfied and the terms of this Consent Order are followed; and
5. This Consent Order shall become final when issued.


Issued at Hartford, Connecticut
this 20th day of February 2018.                       ______/s/__________
                                                                      Jorge L. Perez
                                                                      Banking Commissioner

 

I, Raymond Scott, state on behalf of Santander Consumer USA Inc d/b/a Drive Financial d/b/a Chrysler Capital d/b/a Santander Auto Finance, that I have read the foregoing Consent Order; that I know and fully understand its contents; that I am authorized to execute this Consent Order on behalf of Santander Consumer USA Inc d/b/a Drive Financial d/b/a Chrysler Capital d/b/a Santander Auto Finance; that Santander Consumer USA Inc d/b/a Drive Financial d/b/a Chrysler Capital d/b/a Santander Auto Finance, agrees freely and without threat or coercion of any kind to comply with the sanctions entered herein; and that Santander Consumer USA Inc d/b/a Drive Financial d/b/a Chrysler Capital d/b/a Santander Auto Finance, voluntarily agrees to enter into this Consent Order, expressly waiving the procedural rights set forth herein as to the matters described herein.

                                                             By: ________/s/___________
                                                                   Name:  Raymond Scott
                                                                   Title:  Deputy General Counsel
                                                      

State of:  Texas

County of:  Dallas

On this the 15th day of February 2018, before me, Yazmin Lopez, the undersigned officer, personally appeared Raymond Scott who acknowledged himself/herself to be the Deputy General Counsel of Santander Consumer USA Inc d/b/a Drive Financial d/b/a Chrysler Capital d/b/a Santander Auto Finance, a corporation, and that he/she as such Deputy General Counsel, being authorized so to do, executed the foregoing instrument for the purposes therein contained, by signing the name of the corporation by himself/herself as Deputy General Counsel.

In witness whereof I hereunto set my hand.


                                                                 __________/s/___________
                                                                 Notary Public  
                                                                 Date Commission Expires:  8/19/19


 

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