Iowa Consumers To Get Relief From Subprime Auto Loans

Iowa Attorney General, Tom Miller, joined 33 other attorneys general in announcing a settlement has been reached with one of the nation’s largest subprime auto financing firms, bringing an estimated $550 million in consumer relief. Additional loan forgiveness is expected as part of the settlement. More than 2,300 Iowa consumers could find relief in the settlement with Santander Consumer USA Inc., resolving allegations of violations of consumer protection laws. Santander was accused of exposing customers to unnecessarily high levels of risk and knowingly placing them into auto loans with a high probability of default. “Santander committed some of the same offenses that we saw occur in the subprime mortgage market,” Miller says. “The company stuck consumers with unfair, unaffordable loans, and its failures allowed dealers to inflate borrowers’ incomes and falsify other information.” The petition and consent judgment were filed in Polk County District Court earlier this week, the culmination of investigative efforts dating back to March of 2015. Santander is to pay $65 million to the 34 participating states for restitution on specific subprime consumers who defaulted on loans between Jan. 1, 2010 and Dec. 31, 2019. They will also pay up to $2 million for the settlement administrator for handling of restitution claims and pay an additional $5 million to the states. In addition, the Iowa Consumer Education and Litigation Fund will receive $30,000. A settlement administrator will contact eligible consumers.