By on August 9, 2014


Following GM Financial’s subpoena from the Department of Justice, Santander Consumer said that it had received a subpoena as well related to

“production of documents and communications that, among other things relate to the underwriting and securitization of nonprime auto loans since 2007,”


Reuters is reporting that Santander Consumer is co-operating with the requests. Santander Consumer is a major lender, with Experian reporting that it ranked 5th in used vehicle loan originations in the first quarter of 2014 and 10th overall. Santander Consumer is also partnered with Chrysler Capital, which is Chrysler’s captive financing arm. When reached for comment, Chrysler was unavailable at the time of publication.

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19 Comments on “Santander Consumer Receives DOJ Subpoena...”

  • avatar

    Here is a company that this anti-business DoJ can look into. In my state Santander charges huge loan origination fees – $3-4000 to the dealer just to say yes to the loan, then charges the borrower the 17.99% as well. In other states, they are allowed to charge over 20% on car loans to credit challenged customers.

  • avatar

    I’ve heard bad things about Santander.
    They have what are called “road loans”.
    Yet another name for subprime financing.

    They’ll give you a 17% with a 540 credit score and they charge huge loan origination fees. Dealers hate roadloans because they are strict and difficult to work with.

    One of my client’s wives tried to get a roadloan to buy a car because her husband’s credit was poor and she didn’t want to bring hers down. She took the “roadlon pre-approval” to the dealership trying to do the deal without them having to run their credit. Sure enough that all fell through.

    It’s a shame that subprime financing has to be so viciously detrimental to customers who may or may not have damaged credit through no fault of their own. Even more of a shame many people don’t understand that dealerships backed by banks will usually “work something out”.

    We have a massive dealership network (new/used) called Major World. Though they’ll give you a ridiculous 21.99% if your credit is weak, they WILL get you driving even if you’ve only got $1000 to put down on a used car.


    There are people who have fallen on rough times and are DESPERATE for a little piece of car and are willing to pay “$680 a month on a Corolla” – having just started a new career or recovering from poor credit. Many of them just need the helping hand to get on their feet.

    LET THE BANKS take on the risk THEMSELVES and refuse to bail them out when/if they fail.

    If the government insures their losses thy’ll loan frivolously.

    I’ve seen many situations where a “poor credit score” caused a person to get a less than perfect loan and they had enough job security and cash income to turn the whole thing around – later refinancing to better terms.

    • 0 avatar


      Unfortunately if they’re charging 22% then that IS the free market at work. They can charge that because the risk is so high that no-one else is willing to give that person a loan. They are not being forced by any regulations, neither is the customer to accept it.

      • 0 avatar

        That’s EXACTLY the point. If they are so risky that NO ONE will give a lower rate, then that rate reflects the risk. That IS the correct rate. And it the government forces a lower rate, that will just dry up credit.

        In a free market, competing lenders have an incentive to give credible customers a chance.

    • 0 avatar

      I have a buddy who works in financing for a new car franchise and he said as much. He said they simply *do not* work with RoadLoans.

    • 0 avatar

      This is the free market working. Any time a person has bad credit it IS their fault – assuming no errors of identity theft. Falling on hard times just means that you didn’t have savings in place to cover you when you lost your job or got sick – which is a life choice many people make these days. So many people over extend themselves with credit card debt, auto loans, houses that are too big for them, etc, and don’t have the savings to cover it when things go wrong.

      • 0 avatar

        >> Falling on hard times just means that you didn’t have savings in place

        Absolutely, I’m amazed at the number of people that don’t think of putting aside at least quarter million to cover unplanned medical expenses not covered by insurance. They whine that they can’t afford it because of a life decision to become something like a car salesman rather than a hedge fund manager. Is it that much harder? Owning an NFL team pays well – I just don’t understand why someone would choose to become a Walmart cashier instead. Stupid life choices, that’s what.

    • 0 avatar

      Years ago when I sold cars at a Pontiac-Buick-GMC dealer in Louisiana I had a customer that had gotten his job back in the oil industry and after nursing his beater through the bad times wanted a new truck. Because he had lots of late payments on his TRW his credit was such that we could not get him financed on a new vehicle. We switched him over to a clean used vehicle that we were able to get him approved for. Being new to the business I was horrified and embarrassed to know the rate was 21%, but the fact was that he left feeling grateful to us for working as hard as we did on his behalf. Recently a friend of ours needed a car quickly to replace her Sable that blew its engine. Thanks to an irresponsible ex-husband her credit was ruined, so her options were limited. She got a Journey from the Major World people that cost more than it was worth at a rate like you mentioned. But it’s decent and fulfills her needs. When she’s ready to replace it, no way will she repeat this kind of deal; no sane person with good credit would. However, these subprime loans are serving a necessary function. By all means, if there are abusers then clamp down on them, but I fear that once the Masters of Unintended Consequences get involved a lot of people will be “protected” to the point that they’re pedestrians.

  • avatar

    It’s a witch hunt folks. Here is a business doing consumers a favor and the DOJ is harassing it. I guess there isn’t enough crime in the USA to prosecute, so the DOJ has to go after foreign companies doing business in America. This just goes to prove the chosen ones running Wall Street don’t like the competition.

    • 0 avatar

      They make plenty of money doing it. The loan origination fees basically cover any depreciation they might have in case they have to sell a repo. In the mean time they are raking in 17%++ interest rates on top of it. It’s almost a no lose proposition for them.

    • 0 avatar

      So the hapless consumer pays twice, once in a huge upfront fee (in the form of additional dealer markup) and then in absurdly high interest on a monthly note for 36-72 months? No favors being done here.

      • 0 avatar

        Actually no, it is not the hapless consumer that pays twice it is the poor dealer who is forbidden by law to charge an additional fee because of the poor credit of the consumer. The origination fee usually exceeds the markup on the vehicle and that is why the dealership I work at does not do business with Santander/Road Loans. Dealing with this company involves a lot of time, effort and paperwork with very little return. It is a predatory company that takes advantage of everyone they deal with. We work with sympathetic credit unions that serve the credit challenged community.

      • 0 avatar

        “Hapless consumer” = running a 14MY Altima or Avenger into every parking bollard possible, choosing to spend $$ on wheels, stereos, tint rather than the monthly payment? Yeah. No sympathy here except for the poor automobile.

  • avatar

    Sometimes we can blame it on keeping up with the jones, conspicuous consumption.
    so many of us are so gullible to be sucked into big loans that we will never ever be able to climb out alive.
    Such as wheels worth 20k and u owed 30k. So there will never be any incentive to pay them off. Soon as u got laid off, everything will fall to pieces and comes to a grinding halt!
    Usually thats not happening in isolated case, but a big community surrounding u.
    When houses on your street start hanging up For sale sign, u know the buzzards are circling from above.
    Economy will go in cycles. Fun going up but not so when big corrections are being made.

  • avatar

    Roadloans is a joke because it penalizes especially the independent dealer for a hefty acquisiton fee. Granted, most subprime companies charge discounts, but Roadloans is ridiculous – $2-3,000 unless you’re part of their network. Plus, their stip requirements are ridiculous and their funding time is lousy. Almost as bad a company as CAC. I refuse to do business with either of them.

    CARMAX does, though, which explains alot about their pricing scheme.

  • avatar

    I don’t know about this one. I do broadly expect to see excessive regulation lead to higher consumer prices. OTOH I’ve seen people be outright taken advantage of on absurd interest rates and in my experience that contributes to the likelihood of their default down the road.

    If it was only happening to twenty or thirty somethings with time to rebuild it would be one thing, but it was probably stories of grandma’s etc…being hosed that created the political climate where this regulation was desired.

  • avatar
    Matt Foley

    Anyone who would spend $3000-$4000 on a loan origination fee, when that amount of money will buy a perfectly good used car, is an idiot who deserves to be taken advantage of.

    When I made $7.25/hr, I drove a rusty piece of shit. That’s what poor people should drive while they’re saving and working toward a future in which they are no longer poor.

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