N.Y. Regulator Subpoenas Santander, TD Bank in Subprime Auto Probe
New York's banking regulator has issued subpoenas to TD Bank and Santander over possible consumer abuses in the banks' subprime auto lending divisions, a source familiar with the matter said Friday.
The state Department of Financial Services has also subpoenaed the auto financing divisions of several major car companies, including Ford, Honda, Volkswagen and Nissan, the source said.
Spokespeople for Nissan, Santander and Volkswagen declined to comment. Spokespeople for Ford and Honda did not immediately provide comment. A TD spokesman declined to discuss the matter beyond stating that the Canadian bank's auto finance unit does not make subprime loans in the U.S.
The investigation marks the latest move in an intensifying effort by regulators to keep tabs on the booming market for car loans to borrowers with low credit scores.
Santander has also received a subpoena from the Justice Department, as part of a federal probe into the bank's underwriting standards for auto loans. That investigation, which also includes GM Financial, is being led by Preet Bharara, U.S. attorney for the Southern District of New York.
Ally Financial has also been the target of a Securities and Exchange Commission inquiry into subprime auto loans, the lender disclosed in October.
Additionally, New York District Attorney Cyrus Vance recently issued a subpoena to Capital One Financial in connection with its auto lending business, the company said in a Nov. 3 filing.
News of the New York Department of Financial Services investigation was reported by Reuters.