b'Auto LendingIn 2020, Goodwin tracked 11 publicly announced auto2020 Highlights lending enforcement actions, similar to the 11 such actions Goodwin tracked in 2019. Though statesSantander to Pay $550 Million to End Five-Year brought a majority of the publicly announced actions,Multi-State Investigationthe number of federal enforcement actions did increaseIn May, 34 state attorneys general reached a $550 about 20% year-over-year. The total amount recoveredmillion settlement agreement with Santander Consumer this year was approximately $562 millionmore thanUSA Inc., resolving a five-year investigation into the 40 times the amount recovered in 2019.companys alleged subprime auto lending practices. The states alleged that Santanders credit scoring Key Trendsmodel predicted that certain segments of borrowers had a greater than 70% chance of default, and yet Unlike 2019, during which the CFPB announced noSantander originated auto loans to these borrowers new auto finance enforcement actions, 2020 saw theanyway. The complaint also alleged that Santander CFPB publicly announce four actions related to autofailed to ensure that dealers had verified borrowers finance. In each instance the CFPB took action under itsqualifying information, and that Santanders policies authority to enforce UDAAP.and procedures did not adequately prevent false information from being used in the underwriting In contrast to the CFPB, the DOJ was notably absentprocess. Finally, Santander allegedly required from the auto lending space this year, announcing onlyborrowers to make payments through methods a single settlement and no new public enforcementthat caused borrowers to incur additional fees, and actions or investigations. In recent years, the DOJallegedly misled borrowers about their rights under the has played an active role in this space, particularly asloan contract. Under the settlement, Santander agreed to alleged violations of anti-discrimination laws, suchto waive deficiency balances for some customers as ECOA. In 2020, however, the DOJ took a far lesswho had defaulted ($433 million), to provide debt active role. cancellation for consumers in the high-risk borrower States continued to play the predominant enforcementcategory ($45 million) and additional consumer role in the auto lending space. Over half of publiclyrestitution ($65 million), and to pay costs to the announced actions were UDAAP actions by statesettlement administrator ($2 million) and Multistate attorneys general, including the attorneys general ofWorking Group ($5 million). The settlement allows Massachusetts, Michigan, and Vermont. The amountsSantander to continue to operate its auto lending recovered by states, approximately $553 million, alsodivision, but requires that a Monitoring Committee dwarfed the amounts recovered by federal agencies,comprised of various state attorneys general monitor approximately $10 million. But nearly all of the totalthe company over the next three years. amounts recovered this year are the result of a singleCFPB Settles with Lobel Financial Corporation over enforcement action: the $550 million settlementLoss Damage Waiver Chargesreached between 34 state attorneys general andIn September, the CFPB entered into a consent order Santander, discussed in more detail below. with Lobel Financial Corporation, a California auto loan servicer, resolving allegations that Lobel had charged consumers for loss damage waiver coverage without actually providing the coverage. The CFPB alleged that any time that a borrower failed to sufficiently cover 48'