The Santander Bank’s subprime auto lending is being investigated by Massachusetts Attorney General Martha Coakley relating to assertons that it may be engaged in the type of predatory practices that led to the mortgage and financial crises . The issue is whether Santander lent to borrowers who were unlikely to repay the money and sold those loans to Wall Street, where they were packaged into securities and resold to investors.
The AG has subpoenaed Santander’s US auto finance company to produce documents related to borrowers’ credit histories, the interest rates they were charged, and how the loan risks were described to investors, said Brad Puffer, spokesman for the attorney general. Federal authorities and Caokley’s Office took a similar approach in investigations of subprime mortgage lending a few years ago.
Additionally, the attorney general is questioning a handful of other auto lenders, whom he declined to name, and attorneys general across the country have launched similar investigations into auto loan practices.
Earlier this month, the New York Department of Financial Services, that state’s top bank regulator, said it issued subpoenas to Santander and six other auto lenders over discriminatory practices after it found a significant difference between interest rates offered to minority and other borrowers.
Jeffrey Newman represents whistleblowers