Fed Hits Santander's U.S. Unit With Sweeping Enforcement Action

By Ryan Tracy 

The Federal Reserve is requiring Banco Santander SA to make sweeping improvements to risk management at its U.S. subsidiaries under an enforcement action issued Tuesday.

The Fed faulted the Spanish-owned bank's U.S. unit for deficiencies across a broad swath of its organization, including how the bank manages its capital buffer, daily funding needs, internal audit program, and risk management at its consumer-lending subsidiary, Santander Consumer USA Inc.

The Fed isn't fining the bank, but it reserved the right to do so later and required the bank to write a series of remedial plans to fix the problems.

Representatives from Santander didn't immediately respond to requests for comment.

Santander had previously disclosed the Fed was preparing an enforcement action against the bank and announced last week that Santander Consumer's chief executive Thomas Dundon was stepping down.

--Jeannette Neumann contributed to this article.

Write to Ryan Tracy at [e-mail]

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