2016-CFPB-0012

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UNITED STATES OF AMERICA
CONSUMER FINANCIAL PROTECTION BUREAU
ADMINISTRATIVE PROCEEDING
File No. 2016-CFPB-0012

In the Matter of:

CONSENT ORDER

SANTANDER BANK, N.A.

The Consumer Financial Protection Bureau (Bureau) has reviewed the overdraft
practices of Santander Bank, N.A. (Respondent, as defined below) and has identified the
following law violations: (1) Respondent failed to obtain an affirmative “opt-in” from certain of
its customers before charging them overdraft fees in connection with ATM and one-time debit
card transactions, in violation of Regulation E, 12 C.F.R. § 1005.17, the implementing
regulation of the Electronic Fund Transfer Act, 15 U.S.C. §§ 1693, et seq. (EFTA) and (2)
Respondent, through its vendor, misled consumers about (a) the fees associated with opting in
to overdraft service for ATM and one-time debit card transactions, (b) the consequences of not
opting in to overdraft service for ATM and one-time debit card transactions, (c) the nature of
the sales calls seeking consumers’ consent to opt in to overdraft services for ATM and one-time
debit card transactions, and (d) the type of transactions covered by the overdraft service in
violation of 12 U.S.C. §§ 5531, 5536. Under Sections 1053 and 1055 of the Consumer Financial
Protection Act of 2010 (CFPA), 12 U.S.C. §§ 5563, 5565, the Bureau issues this Consent Order
(Consent Order).

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I
Jurisdiction
1.

The Bureau has jurisdiction over this matter under sections 1053 and 1055 of the CFPA,
12 U.S.C. §§ 5563 and 5565 and Section 1693o(a)(5) of the Electronic Fund Transfer Act,
15 U.S.C. § 1693o(a)(5).
II
Stipulation

2.

Respondent has executed a “Stipulation and Consent to the Issuance of a Consent
Order,” dated July 11, 2016 (Stipulation), which is incorporated by reference and is
accepted by the Bureau. By this Stipulation, Respondent has consented to the issuance
of this Consent Order by the Bureau under sections 1053 and 1055 of the CFPA, 12
U.S.C. §§ 5563 and 5565, without admitting or denying any of the findings of fact or
conclusions of law, except that Respondent admits the facts necessary to establish the
Bureau’s jurisdiction over Respondent and the subject matter of this action.
III
Definitions

3.

The following definitions apply to this Consent Order:
a. “Account” means a demand deposit (checking) or other consumer asset account
established primarily for personal, family, or household purposes, as described in
Regulation E, 12 C.F.R. § 1005.2(b)(1).
b. “Board” means Respondent’s duly-elected and acting Board of Directors.
c. “Covered Overdraft Fees” refers to Overdraft Fees assessed on ATM or one-time
debit card transactions during the Relevant Period.

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d. “Covered Transactions” refers to ATM or one-time debit card transactions during the
Relevant Period.
e. “Customer Service Representative” or “CSR” means a customer service
representative employed by the Respondent’s vendor to conduct consumer calls for
the Opt-in Call Campaigns.
f.

“Effective Date” means the date on which the Consent Order is issued.

g. “Opt-In” means the consumer’s affirmative consent to be charged a fee for Overdraft
Service for ATM and/or one-time debit card transactions, as described in Regulation
E, 12 C.F.R. § 1005.17(b)(1)(iii).
h. “Opt-in Call Campaign” refers to any of the telemarketing campaigns conducted by a
vendor on behalf of the Respondent to enroll consumers into the Sovereign (later
Santander) Account Protector.
i. “Opt-In Rule” means Regulation E’s prohibition against “assess[ing] a fee or charge
on a consumer’s account for paying an ATM or one-time debit card transaction
pursuant to the institution’s overdraft service [without] [o]btain[ing] the consumer’s
affirmative consent, or opt-in, to the institution’s payment of ATM or one-time debit
card transactions . . . .” 12 C.F.R. § 1005.17(b).
j. “Overdraft Fee” means a fee Respondent assessed pursuant to its Overdraft Service.
k. “Overdraft Service,” with respect to an Account, shall have the same definition
provided by 12 C.F.R. § 1005.17: “a service under which a financial institution
assesses a fee or charge on a consumer’s account held by the institution for paying a
transaction (including a check or other item) when the consumer has insufficient or
unavailable funds in the account.”

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l. “Regional Director” means the Regional Director for the Northeast Region for
the Office of Supervision for the Consumer Financial Protection Bureau, or
his/her delegate.
m. “Related Consumer Action” means a private action by or on behalf of one or
more consumers or an enforcement action by another governmental agency
brought against Respondent based on substantially the same facts as described
in Section IV of this Consent Order.
n. “Relevant Period” includes the period from July 1, 2010 to the Effective Date.
o. “Respondent” means Santander Bank, N.A., previously known as Sovereign Bank,
and its successors and assigns.
p. “Service Provider” or “vendor” shall have the same definition provided by 12
U.S.C. § 5481(26):“any person that provides a material service to a covered
person in connection with the offering or provision by such covered person of a
consumer financial product or service, including a person that: (i) participates in
designing, operating, or maintaining the consumer financial product or service;
or (ii) processes transactions relating to the consumer financial product or
service (other than unknowingly or incidentally transmitting or processing
financial data in a manner that such data is undifferentiated from other types of
data of the same form as the person transmits or processes).” This term “does
not include a person solely by virtue of such person offering or providing to a
covered person— (i) a support service of a type provided to businesses generally
or a similar ministerial service; or (ii) time or space for an advertisement for a
consumer financial product or service through print, newspaper, or electronic
media.”

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IV
Bureau Findings and Conclusions
The Bureau finds the following:
4.

Respondent is a national bank with its main office in Wilmington, Delaware. As of
September 30, 2015, Respondent had $89.4 billion in assets and $58.5 billion in total
domestic deposits. Respondent operates a network of nearly 700 retail branch offices
and more than 2300 ATMs in Connecticut, Delaware, Massachusetts, New Hampshire,
New Jersey, New York, Pennsylvania, and Rhode Island.

5.

Respondent is an insured depository institution with assets greater than $10 billion
within the meaning of 12 U.S.C. § 5515(a).

6.

In 2009, Banco Santander S.A. completed its purchase of Sovereign Bank and officially
rebranded the Bank as Santander in October of 2013.

7.

Respondent is a “covered person” as that term is defined by 12 U.S.C. § 5481(6).

8.

Respondent is also a “bank … that directly ... holds an account belonging to a consumer”
and is therefore a “financial institution” as defined by 12 C.F.R. § 1005.2(i).
The Opt-In Rule

9.

Prior to the implementation of the Opt-In Rule, many financial institutions—including
Respondent—provided Overdraft Service for ATM and one-time debit transactions (in
addition to other transactions such as checks and recurring transfers) as a standard
feature of their Accounts. Providing Overdraft Service for those transactions allowed
consumers to complete one-time debit card purchases and ATM withdrawals that would
likely otherwise have been declined because of insufficient or unavailable funds.
However, that service came with a price: financial institutions, including Respondent,
generally charged consumers a fee when the service was used.

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10. The Board of Governors of the Federal Reserve System (Federal Reserve Board) found
that state of affairs concerning because, among other things, many consumers lacked
understanding of the service’s risks, costs, and conditions. In particular, the Federal
Reserve Board noted that many consumers did not understand they could be charged
overdraft fees for using their debit card. As a result, “consumers may unintentionally
overdraw their account based on the erroneous belief that a transaction would be paid
only if the consumer has sufficient funds in the account to cover it.” 74 Fed. Reg. 59033
at 59039 (Nov. 17, 2009).
11.

To address this, the Federal Reserve Board amended Regulation E by adopting the OptIn Rule, which requires financial institutions to obtain consumers’ affirmative consent
or opt-in to Overdraft Service for Covered Transactions before assessing overdraft fees
on such transactions. Only after obtaining that consent can financial institutions charge
Overdraft Fees on Covered Transactions.

12.

The Rule also requires financial institutions to disclose any Overdraft Fees they will
charge based on Covered Transactions. 12 C.F.R. § 1005.17(d)(2).

13.

The Opt-In Rule had a mandatory compliance date of July 1, 2010 for new accounts and
August 15, 2010 for existing accounts. 12 C.F.R. § 1005.17(c).
Respondent’s Response to the Opt-In Rule

14.

Respondent determined that the Opt-In Rule could have a significant negative impact
on its fee revenues.

15.

To protect its fee revenue, Respondent needed to persuade its customers to opt in.

16.

Respondent renamed its Overdraft Service on Covered Transactions the Sovereign (later
Santander) Account Protector (“SAP”).

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17.

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Respondent charged consumers who opted into the SAP $35 for each overdraft on a
Covered Transaction and a $5 fee per consecutive day the account was overdrawn if the
overdraft remained unpaid for more than five business days. Later, Respondent changed
the terms to $35 for each overdraft and an additional, one-time $35 fee on the sixth
business day if the account was still overdrawn.

18.

Respondent’s customers could opt in to SAP through a variety of channels, including at
the branches, online, by mail, and over the phone.

19.

To increase enrollment in SAP, Respondent launched a series of vigorous telemarketing
campaigns, the Opt-in Call Campaigns.

20.

Respondent hired a third-party vendor to conduct the Opt-in Call Campaigns. The
vendor marketed the SAP on both outbound and inbound calls.

21.

Respondent paid the vendor a base amount for each employee hour. Additionally, as an
incentive to enroll more consumers, Respondent paid the vendor a variable premium of
up to approximately $9 per hour if the vendor hit specified sales targets.

22.

The vendor, in turn, incentivized its CSRs to make sales by establishing sales quotas and
requiring a certain number of sales per hour.

23.

In numerous instances, the vendor’s CSRs who failed to achieve the required number of
sales per hour were sent home early and were not paid for the remainder of the day.

24.

The vendor also terminated certain CSRs who continued to miss its sales goals.

25.

Respondent created or approved scripts to be used by the CSRs who conducted the calls
for the Opt-in Call Campaigns.

26.

During a pilot test in 2010, Respondent learned that CSRs were being overly aggressive,
making sales without the consumer’s consent, and not following the script. Respondent
also received complaints from consumers who incurred unauthorized overdraft fees.

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27.

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In response, Respondent temporarily halted the Opt-in Call Campaign for a few days
and conducted further training with the CSRs. Respondent also listened to the
enrollment calls that corresponded with the consumer complaints and noted that either
the consumer did not opt in during the call or inaccurate fee information was provided.

28.

But, as the Opt-in Call Campaigns proceeded over the next several years, CSRs
continued to deviate from the script and provide consumers with incomplete,
inaccurate, or misleading information to persuade the consumers to enroll in the SAP.

29. Nevertheless, Respondent continued to use this same vendor to conduct the Opt-in Call
Campaigns on its behalf until 2014, while continuing to include financial incentives in
the vendor’s contract tied to the number of consumers the vendor enrolled in SAP,
neglecting to properly monitor the vendor, and failing to detect widespread problems
in the Opt-in Call Campaigns.
Findings and Conclusions as to Violations of the Opt-In Rule’s Affirmative
Consent Requirement
30.

In numerous instances during the Opt-in Call Campaigns, CSRs enrolled consumers in
the SAP without their consent.

31.

In numerous instances, the CSRs did not ask the consumers if they wanted to opt-in.
Instead, the CSRs gave consumers a brief description of the product and then had the
consumers verify the last four digits of their social security numbers, which was the
standard enrollment confirmation practice.

32.

For example, the following exchange between a CSR and a consumer resulted in a
consumer being enrolled:
CSR: We have noticed that you have not enrolled in Santander Account Protector
service. This is a free service that allows us to apply our standard overdraft practices for
ATM and debit card transactions. So generally, this means that we may pay ATM and
one time debit card purchases, even if they overdraw your account, and charge you

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overdraft fees. And if you are not enrolled, we typically will decline to pay these
transactions for you. So, you know, basically it’s a free service and, uh, we would like to
send you out Account Protector package for your account ending in . . . . . Would that be
OK?
Consumer: Sure.
CSR: OK, and what is your, uh, can you verify nothing but the last four digits of your
social we have on file for you?
33.

In other instances, the consumers explicitly stated that they did not want to enroll in the
SAP at that time but requested information about the product. In response, the CSRs
enrolled the consumers without their consent or knowledge and told them that they
would receive information about the SAP in less than 10 business days.

34.

For example, the following exchange between a CSR and a consumer resulted in a
consumer being enrolled:
Consumer: OK but that this doesn’t mean that I’m enrolling or anything right now,
right?
CSR: Yeah, no, we’re just um
Consumer: You’re just going to send me the information?
CSR: Yeah, we’re going to, yeah we’re going to send you – um – the information and like
I said you can opt out, um, you know, you know at any time by calling that 1-877-7682265…

35.

The Opt-In Rule prohibits financial institutions from assessing a “fee or charge on a
consumer’s account for paying an ATM or one-time debit card transaction pursuant to
the institution’s overdraft service unless the institution … obtains the consumer’s
affirmative consent, or opt-in, to the institution’s payment of ATM or onetime debit card
transactions[.]” 12 C.F.R. § 1005.17(b)(1)(iii).

36.

As described above, Respondent enrolled consumers into overdraft services for Covered
Transactions without first obtaining their affirmative consent.

37.

When Respondent charged those consumers overdraft fees on Covered Transactions, it
was in violation of the Opt-In Rule, the Electronic Fund Transfer Act, 15 U.S.C. §§ 1693,
et seq., and § 1036(a)(1)(A) of the CFPA, 12 U.S.C § 5536(a)(1)(A).

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Findings and Conclusions as to Deceptive Acts or Practices Regarding Misleading
Consumers about the Fees Associated with Opting into the SAP
38.

CSRs made misrepresentations regarding the fees the consumer would pay if the
consumer opted into the SAP.

39.

In numerous calls, CSRs stated that the SAP is a free service. Often these CSRs would
later only state the fees associated with using the service in a “legal disclosure,” which
was generally read at the end of the call, often quickly, after the consumer consented to
enrollment.

40.

In numerous calls, CSRs reinforced the impression that the SAP is free by telling
consumers “This is not a sales call.”

41.

However, the CSRs were selling Santander’s overdraft service to consumers, and
consumers would ultimately be charged fees for using that service. In fact, Santander’s
own internal documents characterize these transactions as “sales.”

42.

During numerous calls, CSRs failed to inform consumers that, in addition to the initial
$35 fee, Respondent would charge consumers an additional $35 fee on the sixth
business day of any remaining unpaid balance.

43.

During numerous calls, CSRs directly stated or implied that the initial $35 fee was the
only fee charged for an overdraft.

44.

For example, a CSR answered a consumer’s question about whether there is a cost for
the SAP as follows:
CSR: There is no monthly or annual fee and even after you do over, um, overdraw your
account, and then there’s – that’s the only time there’s a fee of $35 and even if it takes
you a while to pay it up, it’s only that $35 that you’ll ever have to pay. There’s no other
fees after that.

45.

During numerous calls, CSRs directly stated or implied that the only charge was a $35
fee on the sixth business day.

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46.

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For example, a CSR responded to a consumer’s statement that he or she did not want to
pay $35 as follows:
CSR: Well, you won't have to pay [the $35 fee] ma’am unless you overdraft your account
and that is still not due until the sixth business day.

47.

During numerous other calls, CSRs directly stated or implied that Santander would not
charge any overdraft fees at all if consumers repaid the overdraft within five business
days.

48.

For example, a CSR made the following statement to a consumer who later agreed to opt
in:
CSR: There is no monthly or annual fee to have this service and you would only incur
the fee if you ever overdraw your account. Would this be something you’d be interested
in having? Basically, if you need to overdraw your account, you can. There’s a $35
transaction fee on the sixth business day. If you pay it back within six business days, we
don’t charge you anything.

49.

In reality, Respondent charged consumers $35 for each overdraft and, after five
consecutive business days of unpaid balance, an additional $35.

50.

In numerous instances, CSRs directly stated or implied that overdraft services provide a
benefit in emergency situations and that non-emergency charges would not result in
overdraft fees. In reality, consumers could incur overdraft fees regardless of whether the
transaction was for an emergency or non-emergency situation.

51.

As described above, in connection with offering or providing consumer financial
products or services, Respondent represented, directly or indirectly, expressly or by
implication, that consumers who enrolled in the SAP:
a. would not have to pay for the service;
b. would only be charged one $35 fee, either at the time of the overdraft or on the sixth
day after the overdraft;

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c. would not be charged an overdraft fee at all if the overdraft was repaid within five
business days; and
d. would only be charged an overdraft fee if the consumer was in an emergency
situation.
52.

In truth and in fact:
a. consumers incurred fees by using Santander’s overdraft service;
b. consumers could be charged two $35 fees for an overdraft, one at the time of the
overdraft and a second on the sixth business day after the overdraft if the account was
still overdrawn;
c. consumers were charged an overdraft fee at the time of the overdraft regardless of
whether they repaid it within five business days; and
d. consumers were charged an overdraft fee regardless of whether the transaction
involved an emergency situation.

53.

Therefore, Respondent’s representations described above are false and misleading, and
constitute deceptive acts or practices in violation of the CFPA, 12 U.S.C. §§ 5531(a) and
5536(a)(1)(B).

Findings and Conclusions as to Deceptive Acts or Practices Regarding Misleading
Consumers about the Consequences of Not Opting into the SAP
54.

CSRs made misrepresentations about the consequences of not opting in to the SAP:
a. In numerous calls, CSRs told consumers that they would be charged overdraft fees on
Covered Transactions even if they did not enroll in the SAP.
b. In numerous calls, CSRs told consumers that they would be subject to daily
transaction and transfer fees in addition to the overdraft fees. CSRs further implied
that these additional fees did not apply to consumers enrolled in the SAP.

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55.

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For example, one CSR made the following statement to a consumer who later agreed to
opt in:
CSR: Now if you are not reenrolled or enrolled into the SAP what’s going to happen
is you’re going to get hit with fees, I mean, all over the place from individually $35
overdraft fee, um, transaction and also maybe transfer fees may apply…

56.

To the contrary, declining the SAP did not expose consumers to any additional fees.

57.

In connection with offering or providing consumer financial products or services,
Respondent represented, directly or indirectly, expressly or by implication, that
consumers would be charged overdraft on Covered Transactions and certain additional
fees even if they did not opt in to Santander’s overdraft services.

58.

In truth and in fact, consumers would not be charged overdraft fees on Covered
Transactions or the additional fees if they did not opt-in to Santander’s overdraft
services.

59.

Therefore, Respondent’s representations, as set forth above, are false and misleading,
and constitute deceptive acts or practices in violation of the CFPA, 12 U.S.C. §§ 5531(a)
and 5536(a)(1)(B).

Findings and Conclusions as to Deceptive Acts or Practices Regarding Misleading
Consumers about the Nature of the Call
60.

CSRs made misrepresentations about the purpose of the call.

61.

In numerous calls, CSRs told consumers “This is not a sales call.”

62.

However, Santander’s internal documents characterize these transactions as “sales.” The
CSRs were selling Santander’s overdraft service to consumers, and consumers would
ultimately be charged fees for using that service.

63.

In numerous calls, CSRs told consumers that the reason for the call was the
Respondent’s name change from Sovereign to Santander, leading consumers to believe

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the reason they needed to opt in to the SAP was the name change. In fact, the
Respondent needed to get these consumers to opt in because the new consumer
protections under the Opt-In Rule mandated that it do so.
64.

For example, one CSR made the following statement:
CSR: The reason for my call today is because, um, a lot of our customers were enrolled
in the account protector whenever the bank was Sovereign and now that we’ve switched
the name to Santander we just wanted to call the customers and make sure they wanted
to be enrolled before we actually enrolled them.

65.

In numerous calls, CSRs told consumers that the reason for the call was to reenroll the
consumers into the SAP when these consumers had not previously been enrolled in the
SAP.

66.

In connection with offering or providing consumer financial products or services,
Respondent represented, directly or indirectly, expressly or by implication, that:
a. Santander was not trying to sell anything to consumers;
b. Santander was inquiring about consumers’ opt-in status because the bank changed its
name from Sovereign to Santander; and
c. Santander was attempting to reenroll the consumers in the SAP.

67.

In truth and in fact:
a. Santander was selling its overdraft service, the SAP, to consumers, and consumers
would be charged fees for using that service;
b. Santander was trying to market its overdraft service, the SAP, to consumers because
the consumers were not currently opted in, and the fact that the bank had changed its
name was irrelevant; and
c. the consumers had not previously opted in to Santander’s overdraft service and thus
the call was not to reenroll the consumers in the SAP.

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68. Therefore, Respondent’s representations, as set forth above, are false and misleading,
and constitute deceptive acts or practices in violation of the CFPA, 12 U.S.C. §§ 5531(a)
and 5536(a)(1)(B).
Findings and Conclusions as to Deceptive Acts or Practices Regarding
Transactions Covered by the SAP
69.

In numerous calls, such as in the examples below, CSRs misrepresented the type of
transactions that were covered by the SAP. CSRs repeatedly told consumers that the
SAP also covered checks. However, the SAP was limited to Covered Transactions.

70.

For example, a CSR had the following exchange with a consumer:
Consumer: What about, what about my checks? I write checks a lot. What about
that?
CSR: The checks are included too. Because they say, if we charge – we would
charge you that overdraft fee of $35 for any transaction that is including checks.
So if you would have a check that you forgot about that went through, that’s
another good example because if you have a check that came through, instead of
sending that check back to whoever you wrote it for, we’re going to go ahead and
pay the check. We’re going to charge you the overdraft fee but instead of sending
it back to whoever you wrote that check to and you having two charges because
probably the bank is going to charge you too and whoever you wrote that check to
is going to charge you. So now the bank is going to pay that for you and you’re
just going to owe them and not two different people.

71.

CSRs also told consumers that other non-Covered Transactions, such as bill pay, were
covered by the SAP, as seen in the following exchange:
Consumer: Now does that also include the bill pay, like if I have a scheduled bill
pay to go through on a specific date?
CSR: Yes sir. Any type of transaction on your account.
Consumer: OK. Great.

72.

Respondent automatically provided overdraft services for checks and bill pay and could
not lawfully condition the payment of checks or bill pay overdrafts on consumers
affirmatively consenting to the SAP.

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73.

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In connection with offering or providing consumer financial products or services,
Respondent represented, directly or indirectly, expressly or by implication, that
overdrafts for checks and bill-pay transactions would be covered by Santander’s
overdraft service, the SAP.

74.

In truth and in fact, the SAP only covers overdrafts from ATM and one-time debit card
transactions, not from checks and bill-pay transactions.

75.

Therefore, Respondent’s representations as set forth above are false and misleading,
and constitute deceptive acts or practices in violation of the CFPA, 12 U.S.C. §§ 5531(a)
and 5536(a)(1)(B).
ORDER
V
Conduct Provisions
IT IS ORDERED, under sections 1053 and 1055 of the CFPA, that:

76.

Respondent and its officers, agents, servants, employees, and attorneys who have actual
notice of this Consent Order, whether acting directly or indirectly, may not violate the
Opt-In Rule or sections 1031 and 1036 of the CFPA, 12 U.S.C. §§ 5531 and 5536, and
must take the following affirmative actions:
a. Respondent and its officers, agents, servants, employees, and attorneys who have
actual notice of this Consent Order, whether acting directly or indirectly, must ensure
that Respondent’s presentation of the Opt-In election to consumers satisfies the
requirements of Regulation E.

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b. Respondent, and its officers, agents, servants, employees, and attorneys who have
actual notice of this Consent Order, whether acting directly or indirectly, may not
misrepresent, or assist others in misrepresenting, expressly or impliedly:
i. the terms and conditions of Overdraft Service for Covered Transactions;
ii. the categories of transactions covered by Overdraft Service;
iii. the risks and costs associated with Opting In;
iv. the risks and costs associated with not Opting In;
v. the fees associated with Opting In;
vi. the nature of any sales or enrollment call for Overdraft Service; or
vii. any other term material to the Opt-In election.
c. Within 90 days after receipt of the non-objection described in subparagraph ii below,
Respondent shall provide all consumers who, based on a full review by Respondent of
its records, were enrolled in the SAP through the Opt-in Call Campaigns an
opportunity to validate their opt-in decisions (Validation). In order to validate an optin decision, Respondent must obtain the consumers’ affirmative consent to
Respondent’s payment of Covered Transactions. No later than 90 days after receipt of
the non-objection described in subparagraph ii below, Respondent must cease
charging Covered Overdraft Fees on all Accounts for which Validation is required but
has not been obtained, unless the consumer affirmatively contacts Respondent to
Opt-In. Validation shall be subject to the following requirements:
i. Within 30 days of the Effective Date, Respondent must submit to the Regional
Director for review and determination of non-objection a comprehensive plan
for obtaining Validation from consumers (Validation Process). The plan must
include the communication channels and methods the Bank proposes using to

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complete the Validation Process as well as any scripts, internal guidance for
communicating with consumers, letters, or direct marketing materials to be
used in the Validation Process. At a minimum, the Validation Process shall
include (a) a balanced presentation of the risks and benefits of Overdraft
Service for Covered Transactions; and (b) an explanation of how the consumer’s
Overdraft Service will change in the event the consumer declines to validate his
or her opt-in decision. Respondent shall not use a Service Provider to
communicate with consumers as part of the Validation Process. Mailing a
document that was written and approved by the Respondent shall not be
considered communication with consumers under this section.
ii. The Regional Director will have the discretion to make a determination of nonobjection to the Validation Process or direct the Respondent to revise it. If the
Regional Director directs the Respondent to revise the Validation Process,
Respondent must make the revisions and resubmit the Validation Process to
the Regional Director within 15 days.
iii. After receiving notification that the Regional Director has made a
determination of non-objection to the Validation Process, Respondent must
implement and adhere to the steps, recommendations, deadlines, and
timeframes outlined in the Validation Process.
d. Respondent, whether acting directly or indirectly, is prohibited from using a Service
Provider to engage in any outbound telemarketing of Overdraft Services for Covered
Transactions to consumers. Nothing in this Order shall be read as an exception to this
Paragraph.

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e. Respondent and its officers, agents, servants, employees, and attorneys who have
actual notice of this Consent Order, whether acting directly or indirectly, may not (i)
require its employees to generate a specific number of opt-ins; (ii) cause any
employee to suffer adverse consequences for failing to satisfy any such requirement;
or (iii) provide employees financial incentives in connection with opt-ins.
f. Within 90 days of the Effective Date, Respondent must develop a new or revised
written policy governing vendor management for Service Providers engaged in
telemarketing of consumer financial products or services. After receiving the Regional
Director’s determination of non-objection described in Section VI, the Respondent
shall implement this new or revised vendor management policy according the
timelines and deadlines set forth in the Compliance Plan. The policy shall require, at a
minimum:
i. An analysis to be conducted by Respondent, prior to Respondent entering into
a contract with a Service Provider relating to the offering or providing of a
consumer financial product or service via telemarketing, of the ability of the
Service Provider to perform telemarketing of the product or service in
compliance with all applicable Federal consumer financial laws and
Respondent’s policies and procedures.
ii. For new and renewed contracts to perform telemarketing of consumer
financial products or services, a written contract between Respondent and the
Service Provider, which sets forth the responsibilities of each party, especially:

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a) the Service Provider’s specific performance responsibilities and duty to
maintain adequate internal controls over telemarketing of the
consumer financial product or service;
b) the Service Provider’s responsibilities and duty to provide adequate
training on applicable Federal consumer financial laws and
Respondent’s policies and procedures to all Service Provider employees
or agents engaged in telemarketing of the consumer financial product
or service;
c) granting Respondent the authority to conduct periodic onsite reviews
of the Service Provider’s controls, performance, and information
systems as they relate to telemarketing of the consumer financial
product or service; this authority must permit Respondent or a third
party agent of the Respondent, who is not affiliated with the
contracting Service Provider, to conduct unannounced live auditing of
calls made for Santander by Service Providers performing outbound
telemarketing of consumer financial products or services; and
d) Respondent’s right to terminate the contract if the Service Provider
materially fails to comply with the terms specified in the contract,
including the terms required by this Paragraph or applicable provision
of this Order.
iii. Periodic onsite reviews by Respondent or a third party agent of the
Respondent, who is not affiliated with the contracting Service Provider, of the
controls, performance, and information systems of any Service Provider
providing outbound telemarketing of consumer financial products or services.

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iv. Auditing of the Service Provider’s telemarketing sales calls, including but not
limited to unannounced live listening of sales calls and randomly reviewing a
representative number of the recently recorded sales calls.
v. A written comprehensive assessment, to be conducted on an annual basis, of
the unfair, deceptive, and abusive acts or practices (“UDAAP”) risk for existing,
new, and recently modified consumer financial products or services as to
which Service Providers engage in telemarketing, including, but not limited to
the UDAAP risk of the governance control, marketing, sales, delivery,
servicing, and fulfillment of services for existing or new such consumer
financial products or services, including the UDAAP risk of marketing and
sales practices.
vi. The development and implementation of written policies and procedures to
effectively manage, detect, and mitigate, on an ongoing basis, the risks
identified in the written assessment required by the preceding subparagraph v.
vii. Comprehensive written policies and procedures for identifying and reporting
any violation of Federal consumer financial laws or Respondent’s policies and
procedures relating to consumer financial products or services by Service
Providers’ employees or agents engaging in telemarketing, in a timely manner,
to a specified executive risk or compliance manager at Respondent. The
manager to whom such reports are made must be independent of the unit
overseeing the sale and marketing of the consumer financial product or service
at issue.
viii. Comprehensive written policies and procedures for the development of
training materials relating to identifying and addressing violations of Federal

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consumer financial laws relating to telemarketing by Service Providers of
consumer financial products or services that will be incorporated into the
existing annual compliance training for appropriate employees.
ix. Written policies and procedures to ensure that the appropriate employees and
departments within Respondent have the requisite authority and status within
Respondent so that appropriate reviews of consumer financial products or
services marketed or sold by Service Providers via telemarketing may occur
and deficiencies are identified and properly remedied.
g. Within 90 days of the Effective Date, Respondent must develop a new or revised
written policy governing the management of consumer complaints. After receiving
the Regional Director’s determination of non-objection described in Section VI, the
Respondent shall implement this new or revised policy governing the management of
consumer complaints according the timelines and deadlines set forth in the
Compliance Plan. The policy shall require Service Providers marketing Overdraft
Services for Covered Transactions to provide any consumer complaints they receive to
Santander, and shall require, at a minimum:
i. the maintenance of adequate records of all written, oral, or electronic
complaints from consumers, formal or informal, received by Respondent and
its Service Providers and the resolution of the complaints, and
ii. the designation of appropriate personnel as responsible for overseeing the
consumer complaint management program, which will include: (a) writing and
revising policies and procedures as necessary, (b) reviewing all consumer
complaints, including those regarding Service Providers, (c) analyzing
consumer complaint data to determine if there exist any patterns of complaints

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caused by common policies, procedures, individuals, or Service Providers, and
(d) if so, making recommendations to eliminate or reduce the number of
complaints.
VI
Compliance Plan
IT IS FURTHER ORDERED that:
77.

Within 90 days of the Effective Date, Respondent must submit to the Regional Director
for review and determination of non-objection a comprehensive compliance plan
designed to ensure that Respondent’s presentation of the Opt-In election complies with
all applicable Federal consumer financial laws and the terms of this Consent Order
(Compliance Plan). The Compliance Plan must include, at a minimum:
a. Detailed steps for addressing each action required by Section V of this Consent Order;
b. Specific timeframes and deadlines for implementation of the steps described above.

78.

The Regional Director will have the discretion to make a determination of non-objection
to the Compliance Plan or direct the Respondent to revise it. If the Regional Director
directs the Respondent to revise the Compliance Plan, the Respondent must make the
revisions and resubmit the Compliance Plan to the Regional Director within 30 days.

79.

After receiving notification that the Regional Director has made a determination of nonobjection to the Compliance Plan, the Respondent must implement and adhere to the
steps, recommendations, deadlines, and timeframes outlined in the Compliance Plan.
VII
Role of the Board

IT IS FURTHER ORDERED that:

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The Board or a committee thereof must review all submissions (including plans, reports,
programs, policies, and procedures) required by this Consent Order prior to submission
to the Bureau.

81.

Although this Consent Order requires the Respondent to submit certain documents for
the review or non-objection by the Regional Director, the Board will have the ultimate
responsibility for proper and sound management of Respondent and for ensuring that
Respondent complies with Federal consumer financial law and this Consent Order.

82.

In each instance that this Consent Order requires the Board to ensure adherence to, or
perform certain obligations of Respondent, the Board or a committee thereof must:
a. Authorize whatever actions are necessary for Respondent to fully comply with the
Consent Order;
b. Require timely reporting by management to the Board on the status of compliance
obligations; and
c. Require timely and appropriate corrective action to remedy any material noncompliance with Board directives related to this Section.
VIII
Order to Pay Civil Money Penalties

IT IS FURTHER ORDERED that:
83.

Under section 1055(c) of the CFPA, 12 U.S.C. § 5565(c), by reason of the violations of
law described in Section IV of this Consent Order, and taking into account the factors in
12 U.S.C. § 5565(c)(3), Respondent must pay a civil money penalty of $10 million to the
Bureau.

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Within 10 days of the Effective Date, Respondent must pay the civil money penalty by
wire transfer to the Bureau or to the Bureau’s agent in compliance with the Bureau’s
wiring instructions.

85.

The civil money penalty paid under this Consent Order will be deposited in the Civil
Penalty Fund of the Bureau as required by section 1017(d) of the CFPA, 12 U.S.C. §
5497(d).

86.

Respondent must treat the civil money penalty paid under this Consent Order as a
penalty paid to the government for all purposes. Regardless of how the Bureau
ultimately uses those funds, Respondent may not:
a. Claim, assert, or apply for a tax deduction, tax credit, or any other tax benefit for any
civil money penalty paid under this Consent Order; or
b. Seek or accept, directly or indirectly, reimbursement or indemnification from any
source, including but not limited to payment made under any insurance policy, with
regard to any civil money penalty paid under this Consent Order.

87.

To preserve the deterrent effect of the civil money penalty in any Related Consumer
Action, Respondent may not argue that Respondent is entitled to, nor may Respondent
benefit by, any offset or reduction of any compensatory monetary remedies imposed in
the Related Consumer Action because of the civil money penalty paid in this action
(Penalty Offset). If the court in any Related Consumer Action grants such a Penalty
Offset, Respondent must, within 30 days after entry of a final order granting the Penalty
Offset, notify the Bureau, and pay the amount of the Penalty Offset to the U.S. Treasury.
Such a payment will not be considered an additional civil money penalty and will not
change the amount of the civil money penalty imposed in this action.

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In the event of any default on Respondent’s obligations to make payment under this
Consent Order, interest, computed under 28 U.S.C. § 1961, as amended, will accrue on
any outstanding amounts not paid from the date of default to the date of payment, and
will immediately become due and payable.

89.

Respondent must relinquish all dominion, control, and title to the funds paid to the
fullest extent permitted by law and no part of the funds may be returned to Respondent.

90.

Under 31 U.S.C. § 7701, Respondent, unless it already has done so, must furnish to the
Bureau its taxpayer identifying numbers, which may be used for purposes of collecting
and reporting on any delinquent amount arising out of this Consent Order.

91.

Within 30 days of the entry of a final judgment, consent order, or settlement in a
Related Consumer Action, Respondent must notify the Regional Director of the final
judgment, consent order, or settlement in writing. That notification must indicate the
amount of redress, if any, that Respondent paid or is required to pay to consumers and
describe the consumers or classes of consumers to whom that redress has been or will
be paid.
IX
Reporting Requirements
IT IS FURTHER ORDERED that:

92.

Respondent must notify the Bureau of any development that may affect compliance
obligations arising under this Consent Order, including but not limited to, a dissolution,
assignment, sale, merger, or other action that would result in the emergence of a
successor company; the creation or dissolution of a subsidiary, parent, or affiliate that
engages in any acts or practices subject to this Consent Order; the filing of any
bankruptcy or insolvency proceeding by or against Respondent; or a change in

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Respondent’s name or address. Respondent must provide this notice, if practicable, at
least 30 days before the development, but in any case no later than 14 days after the
development.
93.

Within 90 days of the Effective Date, and again one year after the Effective Date,
Respondent must submit to the Regional Director an accurate written compliance
progress report (Compliance Report) that has been approved by the Board or a
committee thereof, which, at a minimum:
a. Describes in detail the manner and form in which Respondent has complied with this
Order; and
b. Attaches a copy of each Order Acknowledgment obtained under Section X, unless
previously submitted to the Bureau.
X
Order Distribution and Acknowledgment
IT IS FURTHER ORDERED that,

94.

Within 30 days of the Effective Date, Respondent must deliver a copy of this Consent
Order to each of its board members and executive officers, as well as to any managers or
Service Providers who have responsibilities related to the subject matter of the Consent
Order and employees or agents whose responsibilities include managing, overseeing, or
negotiating contracts with Service Providers engaged in telemarketing.

95.

For 5 years from the Effective Date, Respondent must deliver a copy of this Consent
Order to any business entity resulting from any change in structure referred to in
Section IX, any future board members and executive officers, as well as to any
managers, or Service Providers who will have responsibilities related to the subject
matter of the Consent Order and employees or agents whose responsibilities include

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managing, overseeing, or negotiating contracts with Service Providers engaged in
telemarketing before they assume their responsibilities.
96.

Respondent must secure a signed and dated statement acknowledging receipt of a copy
of this Consent Order, ensuring that any electronic signatures comply with the
requirements of the E-Sign Act, 15 U.S.C. § 7001 et seq., within 30 days of delivery, from
all persons receiving a copy of this Consent Order under this Section.
XI
Recordkeeping
IT IS FURTHER ORDERED that

97.

Respondent must create, or if already created, must retain for at least 5 years from the
Effective Date, the following business records:
a. All documents and records necessary to demonstrate full compliance with each
provision of this Consent Order, including all submissions to the Bureau.
b. Copies of all telemarketing calls; sales scripts; training materials; advertisements;
websites; and other marketing materials relating to the Opt-In Rule.
c. All written records of consumer complaints and refund requests, and any responses
to those complaints or requests, that are recorded and tracked by Respondent in
accordance with Respondent’s policies, whether received directly or indirectly, that
relate to overdraft fees charged on Covered Transactions.

98.

Respondent must make the documents identified in Paragraph 97 available to the Bureau
upon the Bureau’s request.
XII
Notices
IT IS FURTHER ORDERED that:

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Unless otherwise directed in writing by the Bureau, Respondent must provide all
submissions, requests, communications, or other documents relating to this Consent
Order in writing, with the subject line, “In re Santander Bank, N.A., File No. 2016CFPB-0012,” and send them either:
a. By overnight courier (not the U.S. Postal Service), as follows:
Regional Director, CFPB Northeast Region
140 East 45th Street
New York, NY 10017; or
b. By first-class mail to the below address and contemporaneously by email to
Enforcement_Compliance@cfpb.gov:
Regional Director, CFPB Northeast Region
140 East 45th Street
New York, NY 10017
XIII
Cooperation with the Bureau
IT IS FURTHER ORDERED that:

100.

Respondent must cooperate fully with the Bureau in this matter and in any investigation
related to or associated with the conduct described in Section IV. Respondent must
provide truthful and complete information, evidence, and testimony. Respondent must
cause its officers, employees, representatives, or agents to appear for interviews,
discovery, hearings, trials, and any other proceedings that the Bureau may reasonably
request upon 5 days’ written notice, or other reasonable notice, at such places and times
as the Bureau may designate, without the service of compulsory process.
XIV
Compliance Monitoring

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IT IS FURTHER ORDERED that, to monitor Respondent’s compliance with this
Consent Order:
101.

Within 14 days of receipt of a written request from the Bureau, Respondent must submit
additional Compliance Reports or other requested information, which must be made
under penalty of perjury; provide sworn testimony; or produce documents.

102.

Respondent must permit Bureau representatives to interview any employee or other
person affiliated with Respondent who has agreed to such an interview. The person
interviewed may have counsel present.

103.

Nothing in this Consent Order will limit the Bureau’s lawful use of civil investigative
demands under 12 C.F.R. § 1080.6 or other compulsory process.
XV
Modifications to Non-Material Requirements

IT IS FURTHER ORDERED that:
104.

Respondent may seek a modification to non-material requirements of this Consent
Order (e.g., reasonable extensions of time and changes to reporting requirements) by
submitting a written request to the Regional Director.

105.

The Regional Director may, in his/her discretion, modify any non-material
requirements of this Consent Order (e.g., reasonable extensions of time and changes to
reporting requirements) if he/she determines good cause justifies the modification. Any
such modification by the Regional Director must be in writing.
XVI
Administrative Provisions

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The provisions of this Consent Order do not bar, estop, or otherwise prevent the Bureau,
or any other governmental agency, from taking any other action against Respondent,
except as described in Paragraph 107.

107.

The Bureau releases and discharges Respondent from all potential liability for law
violations that the Bureau has or might have asserted based on the practices described
in Section IV of this Consent Order, to the extent such practices occurred before the
Effective Date and the Bureau knows about them as of the Effective Date. The Bureau
may use the practices described in this Consent Order in future enforcement actions
against Respondent and its affiliates, including, without limitation, to establish a pattern
or practice of violations or the continuation of a pattern or practice of violations or to
calculate the amount of any penalty. This release does not preclude or affect any right of
the Bureau to determine and ensure compliance with the Consent Order, or to seek
penalties for any violations of the Consent Order.

108.

This Consent Order is intended to be, and will be construed as, a final Consent Order
issued under section 1053 of the CFPA, 12 U.S.C. § 5563, and expressly does not form,
and may not be construed to form, a contract binding the Bureau or the United States.

109.

This Consent Order will terminate 5 years from the Effective Date or 5 years from the
most recent date that the Bureau initiates an action alleging any violation of the Consent
Order by Respondent. If such action is dismissed or the relevant adjudicative body rules
that Respondent did not violate any provision of the Consent Order, and the dismissal
or ruling is either not appealed or upheld on appeal, then the Consent Order will
terminate as though the action had never been filed. The Consent Order will remain
effective and enforceable until such time, except to the extent that any provisions of this

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Consent Order have been amended, suspended, waived, or terminated in writing by the
Bureau or its designated agent.
110.

Calculation of time limitations will run from the Effective Date and be based on calendar
days, unless otherwise noted.

111.

Should Respondent seek to transfer or assign all or part of its operations that are subject
to this Consent Order, Respondent must, as a condition of sale, obtain the written
agreement of the transferee or assignee to comply with all applicable provisions of this
Consent Order.

112.

The provisions of this Consent Order will be enforceable by the Bureau. For any
violation of this Consent Order, the Bureau may impose the maximum amount of civil
money penalties allowed under section 1055(c) of the CFPA, 12 U.S.C. § 5565(c). In
connection with any attempt by the Bureau to enforce this Consent Order in federal
district court, the Bureau may serve Respondent wherever Respondent may be found
and Respondent may not contest that court’s personal jurisdiction over Respondent.

113.

This Consent Order and the accompanying Stipulation contain the complete agreement
between the parties. The parties have made no promises, representations, or warranties
other than what is contained in this Consent Order and the accompanying Stipulation.
This Consent Order and the accompanying Stipulation supersede any prior oral or
written communications, discussions, or understandings.

114.

Nothing in this Consent Order or the accompanying Stipulation may be construed as
allowing the Respondent, its Board, officers, or employees to violate any law, rule, or
regulation.

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IT IS SO ORDERED, this 13th day of July, 2016.

Kain/Q MW

 

Richard Cordray 
Director
Consumer Financial Protection Bureau

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