Santander USA’s Powell named CEO of embattled subprime auto unit

Santander Consumer in Dallas has a new CEO.

In a leadership shake-up announced Monday, the embattled subprime auto lender announced Scott Powell as its new president and CEO, effective immediately.

Powell is currently CEO of its parent company, Santander Holdings USA, a role he has held since March 2015 and will continue to hold following the promotion. He previously worked at JPMorgan Chase, where was a senior executive in consumer banking and auto finance. Before that, he worked at Citigroup.

Matthew Guillory

Powell succeeds Jason Kulas, who took over as CEO of Santander Consumer two years ago. Kulas is leaving the company to “pursue other opportunities,” according to a press release.

The shakeup comes as Santander Holdings — the U.S. division of Banco Santander, the Spanish banking giant — aims to keep closer tabs on its subprime auto lending unit amid a string of regulatory headaches.

The Federal Reserve in March hit Santander Holdings with an enforcement order that required the Boston-based company to boost oversight of its auto unit.

Santander Consumer has been the subject of numerous federal and state investigations, including a probe on behalf of 30 state attorneys general regarding the underwriting and securitization of subprime auto loans. The auto lender in 2016 also restated its financial results several times, due to a slew of problems with the way it calculated its provision for loan losses.

Powell was named to the board of Santander Consumer in 2016.

“Scott’s role as both [Santander Holdings] CEO and [Santander Consumer] CEO will position SC to grow, to strengthen its commitment to customers and to progress toward operating at major financial institution standards,” said Bill Rainer, the chairman of Santander Consumer, in the release.