Santander Consumer USA is potentially facing an enforcement action from the U.S. Department of Justice and the Consumer Financial Protection Bureau for alleged violations in dealer markups.
SCUSA said in its second-quarter report filed with the Securities and Exchange Commission on Monday that on July 31, “the CFPB notified the Company that it had referred to the DOJ certain alleged violations by the Company of the ECOA regarding … statistical disparities in markups charged by automobile dealers to protected groups on loans originated by those dealers and purchased by the Company.”
Regulators have used similar language in previous cases to identify an alleged “disparate impact” on legally protected groups, in the form of higher rates for dealer markup on auto loans. The CFPB is trying to eliminate or at least reduce dealer discretion in setting consumer rates.
In addition, SCUSA said the CFPB was also referring to the DOJ, “the treatment of certain types of income in the Company’s underwriting process.”
SCUSA declined to comment today. In the quarterly report the company said, “The Company does not believe that there are any proceedings, threatened or pending, that, if determined adversely, would have a material adverse effect on the consolidated financial position, results of operations, or liquidity of the Company.”
