The New York State Department of Financial Services has imposed a fine of $400,000 (345,000 euros) on Santander Consumer USA, the US subsidiary of the Spanish bank, for having applied additional charges on certain vehicle financing loans, as detailed by the supervisor in a statement.
The investigation carried out by the regulator concludes that the entity applied to its clients fees for extending the maturity that were not clearly itemized. In addition to the economic fine, Santander must pay $275,000 (237,000 euros) in refunds to the affected consumers.
Santander Consumer offers its borrowers the possibility of requesting more time to make periodic payments on their loans, although the Department recalls that the State Banking Law prohibits advertising loan terms or features that are false or misleading.
According to the agency's conclusions, the entity only indicated a $25 fee for postponing payments, when in reality it was charging an extension fee of $25 for each month of deferral.
The regulator has indicated that the bank voluntarily stopped applying these unitemized fees, although this practice caused New York residents to pay an additional $237,000 (204,000 euros). Likewise, the entity applied, although without collecting them, unitemized fees totaling $86,000 (74,000 euros) to other borrowers in the state.
The financial entity will be obliged to compensate the affected clients, either by issuing checks that refund the amounts charged, or by waiving the fees that were applied but had not yet been effectively collected.