Santander Consumer USA Chairwoman Resigns for Broader Role at Spanish Lender -- Update

By Tess Stynes 

Former J.P. Morgan Chase & Co. executive Blythe Masters resigned as nonexecutive chairwoman of Santander Consumer USA Holdings Inc., the subprime auto-lending unit of the Spanish banking giant, after less than a year.

Ms. Masters, who was appointed to the position in July 2015, will move into a broader role with parent company Banco Santander SA with a focus on its global digital banking efforts.

Among her new duties, Ms. Masters will be senior adviser on technology and blockchain, the record-keeping technology behind the bitcoin currency.

While alternative currency bitcoin itself has been embroiled in legal battles and volatility, the underlying blockchain technology -- or distributed ledger technology -- has drawn heavy interest from mainstream finance as a potential way to help reduce costs.

Ms. Masters also will join Santander's international advisory board, as well as the board of Santander's online bank, Openbank.

Ms. Masters is chief executive of financial technology startup Digital Asset Holdings LLC -- a startup developing mainstream uses for blockchain technology. Her previous experience includes senior executive roles at J.P. Morgan Chase, including serving as head of its global commodities business from 2007 to 2014, and serving as finance chief of its investment bank from 2004 to 2007.

William Rainer, a former chairman of the U.S. Commodity Futures Trading Commission, will take over as head of Santander Consumer's board.

Ms. Masters's resignation comes after the U.S. Federal Reserve recently rejected the capital plan of Banco Santander SA's U.S. holding company in its annual stress test -- the third year the Fed has faulted the unit, citing deficiencies across a range of business operations. The rejected capital plan marked the latest in a string of setbacks for Santander in the U.S.

Regulators also have faulted risk management at the U.S. consumer-lending subsidiary, whose previous chief executive, Tom Dundon, stepped down in July of 2015.

Santander executives have said during the past couple of years that the regulatory troubles in the U.S. are partially the result of growing pains as the lender builds up from scratch a holding company to oversee its banking unit and consumer-lending subsidiary.

Santander Consumer, one of the largest U.S. auto lenders, also has faced a number of federal inquiries into its auto-lending practices.

Write to Tess Stynes at [e-mail]

(END) Dow Jones Newswires

July 12, 2016 13:25 ET (17:25 GMT)

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