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The chairman and chief executive of Santander Consumer USA Holdings has resigned, as the subprime auto lender remains under scrutiny for its lending and securitization practices.
July 2 -
Two foreign-owned banks Santander and Deutsche Bank failed the Fed's stress test. Two other foreign banks that failed last year, HSBC and RBS Citizens, passed this year.
March 11 -
Banco Santander named a new chief executive for its unit that serves as the holding company for its U.S. retail bank, Santander Bank, and its subprime auto lender, Santander Consumer USA Holdings.
March 2 -
Last year started with a failed stress test and ended with the bank under scrutiny for everything from its capital management to its subprime auto lending policies. But regaining the confidence of regulators is only half the battle; Santander must also figure out how to regain market share its been losing to competitors.
January 5
WASHINGTON The Federal Reserve Bank of Boston reached a broad agreement with the U.S. affiliate of Spanish powerhouse Banco Santander calling for improvements in internal risk management, liquidity and capital adequacy controls.
The agreement released by the central bank Tuesday and dated July 2
Under the pact, Santander Holdings USA a registered bank holding company has 60 days to develop and submit plans for enhancing board oversight of "management and operations of the consolidated organization" with particular enhancement of risk management and capital planning. Those plans must describe actions the board will take to establish and maintain control and oversight over the bank's operations, as well as who is responsible for carrying out those actions.
Santander must also implement an "effective capital planning and stress testing process that is well documented and objectively evaluated by the board of directors and senior management," the agreement says, and that process must take into account "the organization's risk position across all exposures."
The agreement follows a string of bad regulatory news for the Spanish bank. Santander was one of only two banks to fail the qualitative portion of the Fed's
Meanwhile, Santander has faced further scrutiny from the Fed for paying dividends
The written agreement with the Fed "underlines how much work we have to do to meet our standards of excellence and our regulators' expectations," said a spokeswoman for Santander in an emailed statement. "We have begun a comprehensive, multi-year transformation project within our organization. We are confident this project will address the concerns the Federal Reserve has cited and position Santander for long-term success."
The agreement further requires Santander to assess its current firm-wide risk management program. The company must develop "enhanced written policies, procedures, and risk management standards" as well as set "risk tolerance guideline limits" while ensuring adherence to those limits.
The company must also improve its liquidity risk management practices by establishing a consolidated liquidity stress testing framework and liquidity buffer metrics, as well as contingency plans in case liquidity reserves do not perform as expected.