Auto Loan Credit Repair Violations Lead to CFPB Settlement With Lender

Yesterday the Consumer Financial Protection Bureau (Bureau) issued a consent order against Santander Consumer USA Inc. (Santander) to address the Bureau’s finding that it violated the Fair Credit Reporting Act (FCRA). The consent order was issued in connection with Santander providing erroneous consumer loan data to consumer reporting agencies (CRAs). Santander, a subsidiary of Banco Santander S.A., is a leading originator and servicer of nonprime auto loans and leases. Santander furnishes credit information on the auto loans it services by sending monthly data files to CRAs.

The Bureau found that the consumer loan data Santander furnished to CRAs between January 2016 and August 2019 contained many systemic errors that in many instances, could have negatively impacted consumers’ credit scores and access to credit. The consent order requires Santander to take certain steps to prevent future violations and imposes a $4,750,000 civil money penalty.

The Bureau found that Santander furnished consumer loan information to CRAs that it knew or reasonably should have known was inaccurate, including failing to furnish accurate information regarding whether accounts were open or closed and whether consumers were carrying a balance or obligated to make future payments.

The Bureau found that Santander failed to promptly update and correct information it furnished to CRAs that it later determined was incomplete and failed to provide the date of first delinquency on certain delinquent or charged-off accounts.

The Bureau further found that Santander failed to establish and implement reasonable written policies and procedures regarding the accuracy and integrity of the information provided to CRAs. Santander’s conduct violated the FCRA and its implementing regulation, Regulation V. Further, these violations of the FCRA and Regulation V constituted violations of the Consumer Financial Protection Act of 2010.

Under the terms of the consent order, Santander must correct all inaccuracies and errors that the Bureau identified and take certain steps to improve and ensure the accuracy of the consumer information it provides to CRAs. These steps include conducting monthly reviews of account information to assess the accuracy and integrity of information Santander furnishes. Santander must also establish and implement reasonable policies and procedures regarding the accuracy and integrity of the information it furnishes to CRAs.

See also  Can I Get My Bank to Reduce My Car Loan Interest Rate? - JT

The consent order is available here.

Steve Rhode

Leave a Comment