Santander replaced the CEO of its Dallas-based subprime auto finance subsidiary after several years of accounting errors, lawsuits and regulatory issues.
The Madrid-based bank announced Monday that “effective now” Scott Powell is the new President and CEO of Santander Consumer USA. He will assume the role, in addition to being CEO of Santander Holdings USA, the majority owner of the consumer division. He will succeed Jason Kulas, who “resigns to pursue other opportunities”.
The new management will not change the location or staffing of the company’s Dallas headquarters, Powell said. He will split his time between the consumer company’s headquarters in Dallas and the holding company’s headquarters in Boston, but said he plans to spend more time in Texas in the coming months.
Santander Consumer is based at Thanksgiving Tower in downtown Dallas. It has approximately 5,000 employees across the United States, including 3,400 who work in Dallas. Its specialty is providing auto loans to clients with poor credit scores.
Over the past several years, the company has come under scrutiny and scrutiny by the US Federal Reserve. The company failed the Fed’s stress test three years in a row. She was also the subject of lawsuits alleging that the company had made loans to borrowers whom she knew could not afford to repay.
Mark Palmer, analyst at BTIG in New York City, said in a report that “the patience of the company’s parents may have worn off.” He said that unlike other sudden CEO changes, this change could have a neutral or even positive effect on the company’s shares.
Powell started working for Santander about two years ago amid his regulatory issues. He said the company had made “tremendous progress over the past two years.” It passed the Fed’s stress test this year, and the Fed recently lifted a ban which prevented the subsidiary from paying dividends to its Spanish parent company. The company is still under two Fed orders, Powell said.
Powell has said he hopes to put regulatory problems in the past and increase financing and leasing for Chrysler vehicles. Auto maker Chrysler and Santander Consumer have a joint venture, Chrysler capital, which finances cars for dealerships.
Powell has experience in lending and risk management. He previously held positions at JPMorgan Chase & Co., including head of banking and consumer credit, CEO of consumer banking and retail investments, and head of auto finance at Chase. He has also held risk management positions at Citigroup.