Banker & Tradesman file photo

The Federal Reserve Board has ended its 2017 enforcement action with Santander and its auto lending division over its risk management program.

The action had stemmed from the Federal Reserve Bank of Boston’s inspections of Santander in 2015 and a written agreement between the Boston Fed and Santander that the bank would strengthen board oversight and enhance a firmwide risk management program.

Among the issues were deficiencies in the compliance risk management program at Santander Consumer USA, the bank’s Dallas-based vehicle finance company. In the 2017 enforcement action, the Federal Reserve said Santander had completed some but not all of the actions outlined in 2015.

Following the Fed’s announcement yesterday that the enforcement action had been terminated, Santander said in a statement that it has “made progress in strengthening board oversight, compliance, risk management, capital planning and liquidity risk management since.”

“The 2017 Written Agreement required Santander to strengthen risk management across Santander US, and its termination demonstrates the progress Santander has made in recent years,” the bank said in a statement. “The enhancements made to SHUSA’s and [Santander Consumer USA’s] risk programs in response to the 2017 Written Agreement are now fully embedded in Santander’s US operations.”

Tim Wennes, Santander US CEO, said in the statement that he was pleased with the progress made in “resolving these legacy issues.”

“Today’s announcement is an important milestone for Santander in the US and speaks to the hard work and dedication of our colleagues across the US and particularly at [Santander Consumer],” Wennes said.

Santander in 2017 had agreed to a $26 million settlement with the Massachusetts and Delaware attorneys general over the bank’s role in issuing subprime auto loans to consumers who could not afford to repay the loans. Another 34 states last year reached $550 million settlement with Santander.