Santander reaches payment of its car loan; OCC Otting to resign
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Let’s settle this
Santander Consumer USA, one of the largest subprime auto lenders, agreed to a $ 550 million settlement “with nearly three dozen states to pay predatory auto loan fees to low-income, risky borrowers, ”The Wall Street Journal reported. The settlement resolves accusations that the company, the US consumer credit unit of Spanish banking giant Banco Santander, “made loans that borrowers could not afford to repay.” States also claim that Santander failed to monitor resellers who falsified borrower income and other information when submitting loan applications.
“The settlement includes $ 65 million in restitution for consumers. It also involves some $ 433 million in loan cancellation, including for customers who have had their cars repossessed but still owe Santander money. The lender also agreed to give up balances from clients with very low credit ratings who had stopped repaying their loans late last year. “
“Santander knowingly exposing borrowers to unnecessary risk and put them in loans with a high probability of default, ”said Illinois Attorney General Kwame Raoul, who led the coalition, reported the Financial Times.
“The agreement announced Tuesday crowns an investigation that the attorneys general launched in early 2015,” reports Laura Alix of American Banker. The coalition said its investigation revealed that Santander Consumer was aware that certain consumer groups had a high risk of default, but further steered them towards loans with high loan-to-value ratios, high back-end fees and high payments-to-income ratios. “
the Wall Street newspaper
The Comptroller of the Currency Joseph Otting, who “made overhauling the rules of the Community Reinvestment Act a top priority,” is should retire this week, reports the Journal. Otting, a former bank CEO who has held the post since November 2017, “told Senate lawmakers last week that he was looking to accelerate the completion of change amid the coronavirus pandemic.”
The OCC will publish final regulations on Wednesday ”which makes important changes to its proposal to redesign the [CRA]“, a day before Otting’s resignation, reports American Banker.
The truth hurts
“At least 30 state-owned enterprises that received loans under the Paycheck Protection Program say they plan to keep the money – a decision according to some could lead to an audit of their applications. The Treasury Department, after deciding that companies with access to other sources of capital were not eligible for forgivable loans, gave state-owned companies until Monday to return the funds.
While many returned the funds, including AutoNation, Shake Shack, and Ruth’s owner Chris Steakhouse, “at least 30 others said they were keeping the money – about $ 110 million in total – these companies, whose market caps range from around $ 4.5 million to $ 560 million, say they think they’re eligible. But “an audit, they say, could hurt their business by reducing cash flow and resulting in penalties or fines.”
Inside the tent
The US Supreme Court “plans to shed light on the links” between President Trump and Deutsche Bank. But if the Supreme Court ordered Deutsche “to produce the wide range of documents demanded by Congress … it would also give better insight into Deutsche itself.” What risks did he take? And after years of reckless transactions, allegations of false accounting and inept management,has he really changed? “
Short seller TCI Fund Management, “one of Europe’s most successful investors”, is calling for “a criminal investigation into suspected accounting fraud” at Wirecard, the German payment company. “According to German prosecutors, TCI raises suspicions of embezzlement against executives of Wirecard linked to the group’s acquisition of the Indian company Hermes as well as unsecured loans that Wirecard has granted to third-party business partners.”
“Wirecard shares have lost two-fifths of their value since the results of a special six-month KPMG audit were released late last month. The accounting firm said it had encountered ‘hurdles’ in his work and that he was unable to verify that the “lion’s share” of Wirecard’s operating profits between 2016 and 2018 was real.
JPMorgan Chase shareholders re-elected all members of the bank’s board on Tuesday, including former Exxon Mobil CEO Lee Raymond, who “has been targeted by critics who said his role His previous head of a major oil company put him at odds with the goals of the Paris Climate Agreement, “which JPMorgan CEO Jamie Dimon said the bank supports.
“The vote showed investors were prepared to accept Dimon’s claims that the bank may support green initiatives, while continuing funding agreements with certain fossil fuel companies“Reuters said.” Each director received the support of at least 84% of investor votes at the bank’s annual meeting.
Separately, JPMorgan Chase said he had “granted more than $ 30 billion in loans to more than 250,000 businesses“Under the Paycheck Protection Program,” Dimon said. “The average loan size under the (PPP) was $ 122,000 and half of the loans went to companies under five. employees, “Reuters reported.