Santander sued by investors over subprime lending practices
A lawsuit seeking class-action status was filed against Santander Consumer USA last week on behalf of investors who claim the lender misled them about the company’s “auto lending business and underwriting practices.”
The suit follows a U.S. Justice Department subpoena issued to Santander Consumer USA last month, demanding documents related to the lender’s sale of asset-backed securities backed up by subprime auto loans.
Santander Consumer USA said in a filing with the Securities and Exchange Commission last month that the Justice Department wanted “documents and communications that, among other things, relate to the underwriting and securitization of nonprime auto loans since 2007.”
Santander added, “We are cooperating with this request.”
The lawsuit was filed in U.S. District Court in New York. Neither the Justice Department nor Santander Consumer USA has publicly discussed the exact nature of the Justice Department’s concerns that prompted the subpoena.
Last week, Santander Consumer USA disclosed in an SEC document that the suit had been filed. On Tuesday spokeswoman Laurie Kight declined further comment.
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