Fed issues enforcement action against Santander unit

The Federal Reserve issued an enforcement action against Banco Santander SA’s U.S. unit for paying a dividend without permission,

the

Financial Times

reported.

Santander Consumer USA, the American consumer finance unit of Santander Holdings USA Inc., paid about $21 million to shareholders, including Thomas Dundon, CEO of Santander Consumer USA, who owns about 23% of the unit,

a




Wall Street Journal




report said.

The rest of the dividend was paid to Santander Holdings USA, which owns about 60% of Santander Consumer USA and is wholly owned by Banco Santander SA, the article said.

The Fed had prohibited actions that would deplete Santander Holdings’ capital levels without permission because the holding company failed a “stress test” in March, the


Journal


report noted.

The Fed ordered Banco Santander to repay the U.S. unit $21 million and to submit a plan for oversight of dividend payments, the


Journal


article said. Santander is prohibited from declaring dividends without prior permission from the Fed, the report said.

The Fed issued the enforcement action about a week after Ana Patricia Botín was named chairwoman of the bank after the death of her father, Emilio Botín.  (Sources:


Financial Times


, Sept. 19, 2014;


Wall Street Journal


, Sept. 19, 2014.)