Santander Consumer USA Holdings Inc., a unit of Banco Santander SA, will pay a civil money penalty of $1.5 million over its alleged failure to calculate and report its incurred credit loss allowance for at least eight reporting periods.
The SEC, in its order against Santander Consumer, alleged that the company used an incorrect discount rate and incorrectly calculated the accretion of that discount, which impacted its reporting. According to the regulator, Santander Consumer made these errors for years, starting before its initial public offering in January 2014 and continuing through most of 2016.
The errors mostly resulted from Santander Consumer's flawed internal accounting controls, which took years for it to remediate, according to the SEC.
Santander Consumer was asked to pay $9.5 million to settle a class-action lawsuit in the U.S. District Court for the Northern District of Texas over its failure to disclose adverse facts in its periodic filings, and to disclose changes in its methodology for estimating credit loss allowances.