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2018-BCFP-000822.Document 1Filed 11/20/2018Page 8 of 29Respondent’s customer call representatives did not disclose how principal andinterest would be allocated in payments following the extension period.Respondent’s customer call representatives told consumers that payments,once resumed at the end of the extension period, would remain the same asbefore.23.Respondent’s scripts for offering Extensions stated that “interest wouldcontinue to accrue,” but Respondent failed to explain to consumers when thatinterest would be paid or that the interest accrued during the extension periodwould have to be paid off in full before the consumer would be able to pay downany principal, resulting in slower principal reduction and more interest paid,even if the consumer made timely payments, over the life of the loan.24.Respondent’s customer call representatives did not disclose to ExtensionConsumers before enrollment the additional amount of interest that consumerswould have to pay over the life of the loan by entering into Extensions.25.Respondent’s call representatives told consumers that interest continued toaccrue during the Extension and that the loan maturity date would beextended, which likely created the misimpression that the interest would not bepaid immediately upon a consumer’s next scheduled payment. In fact, the nextpayment the consumer made would first be applied to the interest accrued onthe unpaid amount financed from the date Respondent last received a paymentfrom the consumer.26.During the Extension Relevant Period, Respondent has enrolled consumersinto more than 2.3 million Extensions.

2018-BCFP-000827.Document 1Filed 11/20/2018Page 9 of 29Section 1036(a)(1)(B) of the CFPA prohibits “unfair, deceptive, or abusive” actsor practices. 12 U.S.C. § 5536(a)(1)(B).28.As described in Paragraphs 18 through 26, in connection with the advertising,marketing, promoting, or offering of Extensions, in numerous instances,Respondent represented expressly or impliedly that the extended payment(including interest accrued during the extension period) would be added to theend of the consumer’s loan, and that the repayment period would be extendedfor the same number of months for which the Extension Consumers enteredinto an Extension.29.In fact, the interest that accrued during a consumer’s Extension would be paidimmediately after the Extension ended upon a consumer’s next scheduledpayment, and Extension Consumers would have to continue to repay theirloans for a greater number of months than the duration of the extension period.30.Thus, Respondent’s representations, as described in Paragraph 28, constitutedeceptive acts or practices in violation of sections 1031(a) and 1036(a)(1)(B) ofthe CFPA, 12 U.S.C. §§ 5531(a), 5536(a)(1)(B).ORDERVConduct ProvisionsIT IS ORDERED, under sections 1053 and 1055 of the CFPA, that:31.Respondent, and its officers, agents, servants, employees, and attorneys whohave actual notice of this Consent Order, whether acting directly or indirectly,in connection with the advertising, marketing, promotion, offering for sale,

2018-BCFP-0008Document 1Filed 11/20/2018Page 10 of 29sale, or performance of any consumer financial product or service, may notmisrepresent, or assist others in misrepresenting, expressly or impliedly:a. The benefits available to consumers through S-GUARD GAP;b. The limitations associated with S-GUARD GAP;c. The manner in which Extensions affect the payments otherwise due duringthe extension period to the end of the loan;d. The effects of entering into an Extension on the allocation of principal andinterest for loan payments following the extension period; ore. Any other fact material to consumers concerning Extensions and S-GUARDGAP, such as: the total costs, and any restrictions, limitations, or conditions32.Respondent and its officers, agents, servants, employees, and attorneys whohave actual notice of this Consent Order, whether acting directly or indirectly,must take the following affirmative actions:a. Clearly and Prominently disclose during enrollment calls, on its Extensionauthorization forms, and on Extension confirmation letters the followingmaterial terms of an Extension: the effect of an Extension on a consumer’sloan maturity date, the application of payments between interest andprincipal when the consumer resumes making payments, that the interestaccrued during the extension period will be paid before any payments toprincipal when the consumer resumes making payments, and that theExtension may delay repayment of principal, resulting in additional interestaccruing over the life of the loan than if the consumer had not entered theExtension. Respondent shall not be required to disclose the additional

2018-BCFP-0008Document 1Filed 11/20/2018Page 11 of 29amount of interest that a consumer would have to pay over the life of the loanby entering into the Extension;b. Clearly and Prominently disclose in writing the material terms of S-GUARDGAP before the consumer agrees to enroll, including any LTV limitations andwhether any LTV limitation applies to the consumer; andc. For consumers who purchased or enrolled in S-GUARD GAP during the GAPRelevant Period, Respondent must cease applying any limitation associatedwith the consumer’s LTV ratio to S-GUARD GAP claims.VICompliance PlanIT IS FURTHER ORDERED that:33.Within 60 days of the Effective Date, Respondent must submit to the RegionalDirector for review and determination of non-objection a comprehensivecompliance plan designed to ensure that Respondent’s marketing, offering andproviding of Extensions and S-GUARD GAP comply with the CFPA’sprohibition on deceptive acts or practices, and the terms of this Consent Order(Compliance Plan). The Compliance Plan must include, at a minimum:a. Detailed steps for addressing each action required by this Consent Order;b. Templates of all new or revised forms and marketing materials for S-GUARDGAP that Respondent seeks to send to consumers to comply with the terms ofthis Consent Order;c. Templates of all new or revised Extension authorization forms and Extensionconfirmation letters that Respondent seeks to send to consumers to complywith the terms of this Consent Order;

2018-BCFP-0008Document 1Filed 11/20/2018Page 12 of 29d. Detailed steps to enhance and strengthen Respondent’s compliancemanagement systems relating to the marketing, offering and providing of SGUARD GAP and Extensions;e. Detailed steps to enhance and strengthen Respondent’s training and oversightof all agents, employees, and service providers involved in marketing,offering, and providing S-GUARD GAP and in offering Extensions to ensurethat the terms of S-GUARD GAP and of Extensions are communicated Clearlyand Prominently to consumers; andf. Specific timeframes and deadlines for implementation of the steps describedabove.34.To the extent Respondent no longer offers or provides S-GUARD GAP and/orExtensions, Respondent is not required to submit a Compliance Plan regardingsuch product or service; provided, however, that if Respondent elects to againoffer the product or service while this Consent Order is in effect, it must submitto the Regional Director notice of its intention to do so at least 30 days prior tooffering or providing that product or service.35.The Regional Director will have the discretion to make a determination of nonobjection to the Compliance Plan or direct Respondent to revise it. If theRegional Director directs Respondent to revise the Compliance Plan,Respondent must make the revisions and resubmit the Compliance Plan to theRegional Director within 15 days.36.After receiving notification that the Regional Director has made adetermination of non-objection to the Compliance Plan, Respondent must

2018-BCFP-0008Document 1Filed 11/20/2018Page 13 of 29implement and adhere to the steps, recommendations, deadlines, andtimeframes outlined in the Compliance Plan.37.Within 60 days of the Effective Date, the Board (or a relevant committeethereof) must approve a written unfair, deceptive, and abusive acts or practicesrisk management program (Risk Management Program) for any consumerfinancial products or services related to auto loan origination or servicingoffered by Respondent or through service providers, to prevent violations ofsections 1031 and 1036 of the CFPA.38.Respondent’s internal audit department must conduct an annual assessment ofRespondent’s compliance with the Risk Management Program and the findingsmust be memorialized in writing. Within 10 days of completing eachassessment, Respondent’s internal audit department must provide its writtenfindings to Respondent’s Audit Committee and the Regional Director.39.Within 90 days of the Effective Date, Respondent must develop trainingmaterials sufficient to implement the Risk Management Program, andincorporate the new training materials into the existing annual compliancetraining for appropriate employees.40.The Board must ensure that there is oversight of the Risk ManagementProgram required by this Section by Respondent’s senior risk managers andsenior management.

2018-BCFP-0008Document 1Filed 11/20/2018Page 14 of 29VIIRole of the BoardIT IS FURTHER ORDERED that:41.The Board (or a relevant committee thereof) must review all submissions(including plans, reports, programs, policies, and procedures) required by thisConsent Order prior to submission to the Bureau.42.Although this Consent Order requires Respondent to submit certain documentsfor the review or non-objection by the Regional Director, the Board will havethe ultimate responsibility for proper and sound management of Respondentand for ensuring that Respondent complies with Federal consumer financiallaw and this Consent Order.43.In each instance that this Consent Order requires the Board to ensureadherence to, or to perform certain obligations of Respondent, the Board must:a. Authorize whatever actions are necessary for Respondent to fully complywith this Consent Order;b. Require timely reporting by management to the Board on the status ofcompliance obligations; andc. Require timely and appropriate corrective action to remedy any materialnon-compliance with any failures to comply with Board directives relatedto this Section.

2018-BCFP-0008Document 1Filed 11/20/2018Page 15 of 29VIIIOrder to Pay RestitutionIT IS FURTHER ORDERED that:44.Within 10 days of the Effective Date, Respondent must reserve or deposit into asegregated deposit account 1,980,873, for the purpose of providing restitutionpaid by check as described in paragraph 46 to Affected Consumers as requiredby this Section.45.Within 45 days of the Effective Date, Respondent must submit to the RegionalDirector for review and non-objection a comprehensive written plan forproviding restitution consistent with this Consent Order (Redress Plan). TheRegional Director will have the discretion to make a determination of nonobjection to the Redress Plan or direct Respondent to revise it. If the RegionalDirector directs Respondent to revise the Redress Plan, Respondent must makethe revisions and resubmit the Redress Plan to the Regional Director within 15days. After receiving notification that the Regional Director has made adetermination of non-objection to the Redress Plan, Respondent mustimplement and adhere to the steps, recommendations, deadlines, andtimeframes outlined in the Redress Plan.46.The Redress Plan must:a. Require Respondent to provide restitution to the approximately 3,493accounts of Affected Consumers, estimated to be 1,980,873 in payments bycheck and 7,312,953 in statement credits, as follows:a. For each Affected Consumer with a closed or open account with a zerobalance who paid off his or her balance(s) after a total loss, a certified

2018-BCFP-0008Document 1Filed 11/20/2018Page 16 of 29or bank check to each Affected Consumer equal to the total amount theAffected Consumer paid to Respondent after the total loss, estimated tobe 1,356,841;b. For each Affected Consumer with a closed or open account with anoutstanding balance (where Respondent has not charged off suchAffected Consumer’s account), and who made partial paymentstowards his or her balance(s) after a total loss, (a) a certified or bankcheck to the Affected Consumer equal to the total amount the AffectedConsumer paid to Respondent after the total loss, estimated to be 216,091, and (b) a statement credit reducing any outstanding balanceto zero, estimated to be 1,267,935 in statement credits. For eachAffected Consumer’s account that Respondent has sold, Respondentmust take steps to reacquire the account and apply a statement creditreducing the balance to zero; if Respondent is unable to reacquire theaccount, Respondent must provide restitution as provided in theRedress Plan;c. For each Affected Consumer with a closed or open account (whereRespondent has charged off such Affected Consumer’s account), (a) acertified or bank check to the Affected Consumer equal to the totalamount paid by the Affected Consumer on the account after the date ofthe total loss, estimated to be 407,941, and (b) a statement creditreducing any outstanding balance to zero, estimated to be 6,045,018in statement credits. For each Affected Consumer’s account thatRespondent has sold, Respondent must take steps to reacquire the

2018-BCFP-0008Document 1Filed 11/20/2018Page 17 of 29account and apply a statement credit reducing the balance to zero; ifRespondent is unable to reacquire the account, Respondent mustprovide restitution as provided in the Redress Plan; andd. For all Affected Consumers, Respondent shall correct any informationfurnished to any consumer reporting agency to show the AffectedConsumer’s account as paid in full or closed with zero balance as of thedate of Respondent’s S-GUARD GAP payment.b. Specify that Respondent must attempt to acquire from securitization trustseach Affected Consumer’s account for purposes of applying statement credits,and that in the event that Respondent is unable to acquire an account,Respondent must provide 100 in the form of a certified or bank check to theAffected Consumer in lieu of a statement credit.c. Describe the methodology used to determine the population of AffectedConsumers;d. Describe the processes for issuing, delivering, and tracking payments to allAffected Consumers, including processes for handling any unclaimed funds;e. Describe the process for applying statement credits to reduce outstandingbalances;f. Describe the process for reacquiring accounts sold or transferred to thirdparties, applying statement credits to reduce outstanding balances on thosereacquired accounts, and the process for providing compensation in lieu ofrestitution to any Affected Consumers whose accounts Respondent is unableto reacquire;g. Describe the process for providing restitution for accounts in bankruptcy;

2018-BCFP-0008Document 1Filed 11/20/2018Page 18 of 29h. Describe the process for correcting information furnished to consumerreporting agencies consistent with Paragraph 46(a)(iv), including howRespondent will correct trade lines for accounts subsequently sold ortransferred to third-parties;i. Describe the procedures for monitoring compliance with the Redress Plan;j. Include the form of the letter (Notification Letter) to be sent notifyingAffected Consumers of the restitution, which must include languageexplaining the manner in which the amount of restitution was calculated anda statement that the provision of the payment or statement credit is inaccordance with the terms of this Consent Order;k. Include the form of the envelope that will contain the Notification Letter;l. Provide that Respondent must not include in any envelope containing aNotification Letter any materials other than the approved letter and check,unless Respondent has obtained written confirmation from the RegionalDirector that the Bureau does not object to the inclusion of such additionalmaterials; andm. Provide that Respondent must make reasonable attempts to obtain a currentaddress for any Affected Consumer whose Notification Letter is returned forany reason, using the National Change of Address System, and requiringRespondent to promptly re-mail all returned letters to current addresses, ifany.47.Respondent may not condition the payment of any restitution to any AffectedConsumer under this Consent Order on that Affected Consumer’s waiving anyright.

2018-BCFP-000848.Document 1Filed 11/20/2018Page 19 of 29After completing the Redress Plan, if the amount of restitution provided bycheck to Affected Consumers is less than 1,980,873, within 30 days of thecompletion of the Redress Plan, Respondent must pay to the Bureau, by wiretransfer to the Bureau or to the Bureau’s agent, and according to the Bureau’swiring instructions, the difference between the amount of restitution providedby check to Affected Consumers and 1,980,873.49.The Bureau may use these remaining funds to pay additional redress toAffected Consumers. If the Bureau determines, in its sole discretion, thatadditional redress is wholly or partially impracticable or otherwiseinappropriate, or if funds remain after the additional redress is completed, theBureau will deposit any remaining funds in the U.S. Treasury as disgorgement.Respondent will have no right to challenge any actions that the Bureau or itsrepresentatives may take under this Section.50.Within 90 days of the completion of the Redress Plan, Respondent must submitto the Regional Director a report tracking Respondent’s efforts to execute theRedress Plan, including identifying:a. the population of Affected Consumers;b. the amount and method of restitution to each Affected Consumer;c. the status and amount of balances for Affected Consumers, including foraccounts Respondent reacquired from third parties;d. the status of payments or statement credits to each Affected Consumer; ande. the amount and planned disposition of all unclaimed payments.

2018-BCFP-0008Document 1Filed 11/20/2018Page 20 of 29IXOrder to Pay a Civil Money PenaltyIT IS FURTHER ORDERED that:51.Under section 1055(c) of the CFPA, 12 U.S.C. § 5565(c), by reason of theviolations of law described in Section IV of this Consent Order, and taking intoaccount the factors in 12 U.S.C. § 5565(c)(3), Respondent must pay a civilmoney penalty of 2,500,000 to the Bureau.52.Within 10 days of the Effective Date, Respondent must pay the civil moneypenalty by wire transfer to the Bureau or to the Bureau’s agent in compliancewith the Bureau’s wiring instructions.53.The civil money penalty paid under this Consent Order will be deposited in theCivil Penalty Fund of the Bureau as required by section 1017(d) of the CFPA, 12U.S.C. § 5497(d).54.Respondent must treat the civil money penalty paid under this Consent Orderas a penalty paid to the government for all purposes. Regardless of how theBureau ultimately uses those funds, Respondent may not:a. Claim, assert, or apply for a tax deduction, tax credit, or any other tax benefitfor any civil money penalty paid under this Consent Order; orb. Seek or accept, directly or indirectly, reimbursement or indemnification fromany source, including but not limited to payment made under any insurancepolicy, with regard to any civil money penalty paid under this Consent Order.

2018-BCFP-0008Document 1Filed 11/20/2018Page 21 of 29XAdditional Monetary ProvisionsIT IS FURTHER ORDERED that:55.In the event of any default on Respondent’s obligations to make payment underthis Consent Order, interest, computed under 28 U.S.C. § 1961, as amended,will accrue on any outstanding amounts not paid from the date of default to thedate of payment, and will immediately become due and payable.56.Respondent must relinquish all dominion, control, and title to the funds paid tothe fullest extent permitted by law and no part of the funds may be returned toRespondent.57.Under 31 U.S.C. § 7701, Respondent, unless it already has done so, mustfurnish to the Bureau its taxpayer identifying numbers, which may be used forpurposes of collecting and reporting on any delinquent amount arising out ofthis Consent Order.58.Within 30 days of the entry of a final judgment, consent order, or settlement ina Related Consumer Action, Respondent must notify the Regional Director ofthe final judgment, consent order, or settlement in writing. That notificationmust indicate the amount of redress, if any, that Respondent paid or is requiredto pay

SANTANDER CONSUMER USA INC. The Bureau of Consumer Financial Protection (Bureau) has reviewed certain lending and marketing practices Santander Consumer USA Inc.of (Respondent, as defined below) and has identified the following law violations: (1) Respondent engaged in deceptive acts prac