Santander settles Massachusetts subprime auto mortgage case for $5.56 million

The brand of Santander financial institution is seen at a department in Mexico Metropolis, Mexico April 12, 2019.REUTERS/Edgard Garrido

(Reuters) – Subprime auto lender Santander Client USA Inc has agreed to pay $5.56 million to resolve allegations by Massachusetts’ lawyer normal that it didn’t present enough disclosures to customers about its debt assortment practices.

Friday’s settlement with Massachusetts Lawyer Basic Maura Healey got here almost 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 newest between Santander and Massachusetts. The corporate in 2017 agreed to pay $25.9 million to resolve earlier investigations by Massachusetts and Delaware into its financing and securitization of sub-prime auto loans.

The newest settlement, filed in Suffolk County Superior Courtroom in Boston, coated conduct that befell after November 2017. Santander didn’t admit wrongdoing.

Santander in a press release mentioned the deal associated to a change in Massachusetts regulation courting again to 2018 that impacted it and different lenders and that it had made changes in 2019 to be compliant with the regulation.

Greater than 1,000 debtors in Massachusetts are anticipated to be eligible for reduction beneath the settlement, which additionally supplies for debt reduction and credit score restore, Healey mentioned.

She alleged that Santander failed to offer customers sufficient info concerning how any deficiencies left on their auto loans can be calculated after their automobiles have been repossessed.

“Shoppers scuffling with auto mortgage debt ought to get clear info from lenders to assist them navigate repossession and different assortment actions,” Healey, a Democrat, mentioned in a press release.

Healey in September struck a $27.2 million settlement with one other subprime lender, Credit score Acceptance Corp, over claims it misled traders and made high-interest loans to debtors that it knew they’d be unable to repay.

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

The case is Commonwealth of Massachusetts vs. Santander Client USA Inc., Suffolk County Superior Courtroom, No. 2284CV00377.

For Massachusetts: Glenn Kaplan of the Massachusetts Workplace of the Lawyer Basic

For Santander: Christopher Pfirrman of Santander

(Editor’s Be aware: This story has been up to date with a remark from Santander.)

Our Requirements: The Thomson Reuters Belief Ideas.