Attorney General and Banking Commissioner join multistate settlement agreement with Santander Consumer USA

CONCORD -- Attorney General Gordon J. MacDonald and Bank Commissioner Gerald H. Little announced that New Hampshire has joined a multistate settlement agreement with Santander Consumer USA Inc., the largest subprime auto financing company. The agreement includes direct relief to consumers, totaling $550 million nationally, and even more relief in the form of additional deficiency waivers. The settlement will result in more than $3 million in direct relief for New Hampshire consumers.

Thursday’s settlement stems from a multistate investigation by 34 attorneys general of Santander’s subprime lending practices. The attorneys general allege that Santander, through its use of sophisticated credit scoring models to forecast default risk, knew that certain segments of its population were predicted to have a high likelihood of default. Santander exposed these borrowers to unnecessarily high levels of risk through high loan-to-value ratios, significant backend fees, and high payment-to-income ratios.