Santander Consumer USA has agreed to pay $400,000 to settle claims by New York state over misleading lending practices, an issue the company says stems from a "legacy disclosure issue" dating back nearly a decade.
The details: The settlement resolves allegations by the New York State Department of Financial Services that Santander charged undisclosed fees related to auto-loan payment extensions, Local SYR reported.
A state investigation found that while Santander disclosed a one-time $25 fee for automotive loan payment extensions, some borrowers were charged $25 for each month of the extension.
In addition to the $400,000 settlement, Santander will return more than $275,000 to affected borrowers.
Acting Superintendent Kaitlin Asrow of the New York State Department of Financial Services said the "settlement puts money back in the pocket of New Yorkers for clear violations."
What they’re saying: “Santander and its U.S. Auto business are committed to conducting business the right way and meeting all our regulatory obligations,” Santander told CDG News in an emailed statement. “This agreement closes the book on a legacy issue from nearly a decade ago, which occurred over a limited period, and was voluntarily discontinued in 2017.”
Why it matters: The settlement serves as another reminder of the heightened regulatory scrutiny surrounding auto finance and lending disclosures, underscoring the importance of transparency in financing and F&I processes as regulators continue to closely examine consumer-facing lending practices.
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Between the lines: While relatively small in scale, the New York settlement follows several other actions tied to practices that predate Santander's broader efforts to overhaul its operations and compliance procedures.
The Spain-based lender agreed to pay $26 million in December 2025 to settle a tax fraud case in France dating back to 2011.
In 2020, Santander's U.S. unit paid roughly $550 million to resolve allegations it violated consumer protection laws stemming from an investigation launched in 2015.
Bottom line: Although Santander characterizes the issue as a legacy matter, the settlement does emphasize how lending and disclosure practices can create long-term regulatory risks. And for dealers, it reinforces the importance of clear communication, accurate disclosures, and strong compliance processes as scrutiny of consumer financing remains elevated.
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