The New York State Department of Financial Services has settled with Santander Consumer USA Inc., requiring the lender to pay a USD 400,000 penalty and more than USD 275,000 to eligible impacted borrowers after an investigation found violations of New York Banking Law tied to automobile loan extension fees. The core issue was that borrowers were charged fees that were not properly disclosed in the extension agreement presented to them. The Department found that Santander Consumer's extension agreement disclosed a single USD 25 extension fee, but in practice the company charged USD 25 per month. According to the investigation, that resulted in New York borrowers paying about USD 237,000 in undisclosed fees, while another USD 86,000 in undisclosed fees was assessed but not collected. Santander Consumer had already stopped charging the fees. Under the settlement, eligible borrowers will receive either refund checks with interest for fees paid or waivers of assessed but unpaid fees. The Department noted that consumers who had an automobile loan with Santander prior to 2018 may be eligible for restitution.
New York State Department of Financial Services2026-06-03
New York State Department of Financial Services fines Santander Consumer USA USD 400,000 and orders more than USD 275,000 in borrower restitution over undisclosed auto loan extension fees
The New York State Department of Financial Services settled with Santander Consumer USA Inc., which will pay a USD 400,000 penalty and more than USD 275,000 to eligible borrowers for violations of New York Banking Law related to automobile loan extension fees. DFS found that Santander disclosed a single USD 25 extension fee but charged USD 25 per month, leading to approximately USD 237,000 in undisclosed fees paid and USD 86,000 assessed but unpaid. Under the settlement, affected borrowers will receive refunds with interest or waivers.