Santander Bank Under Investigation in Mass. for Possible Auto Loan Fraud

By Kasandra Brabaw

Santander Bank is under scrutiny as Massachusetts Attorney General Martha Coakley investigates the bank’s records for evidence of fraudulent behavior.

Coakley subpoenaed Santander Bank’s U.S. auto finance company for its borrowers credit histories, the interest rates they were charged, and loan risks, according to the Boston Globe.

Santander has a branch on Massachusetts Avenue in Lexington.

The Attorney General is looking for evidence that Santander’s auto lending business knowingly lent money to borrowers who could not make payments, then sold those loans to Wall Street. The loans were then packaged into securities and resold to investors, the Associated Press reports.

“We are using our experience, gained in holding banks responsible for unfair and predatory mortgage loans, to ensure consumers are protected in other areas of lending,” the Attorney General’s spokesman Brad Puffer told the Globe.

In a statement about the investigation, Santander said the company is cooperating with the Attorney General’s office and will “comply with all lending and loan servicing laws as well as the rules and guidance of our supervisors and regulators.”

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Photo credit: Santander Bank