“Santander Consumer USA will pay $65 million to states and forgive hundreds of millions more in consumer debt as part of a settlement with a group of attorneys general over practices in its subprime auto lending business,” reports Laura Alix in American Banker.

“The attorneys general, representing 33 states and the District of Columbia, said the Dallas-based lender had exposed borrowers to unnecessarily risky loans with a high chance of default. In addition to paying $65 million in restitution, Santander Consumer has also agreed to forgive nearly $500 million in car loan debt to borrower nationwide.”

“Santander defrauded desperate consumers by placing them into auto loans the company knew these customers could never afford to pay, resulting in defaults and negative ratings on consumers’ credit reports.”

“The agreement announced Tuesday caps an investigation the attorneys general launched early in 2015 into the U.S. consumer lending unit of the Spanish banking giant Banco Santander. The coalition said its investigation revealed Santander Consumer knew that certain groups of consumers had a high risk of default, but still steered them into loans with high loan-to-value ratios, significant backend fees and high payment-to-income ratios.”

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The Texas Plain Language law will mandate that auto finance contracts be written at an 11th-grade reading level by 2017, writes Nicole Munro of Hudson Cook LLP in an article published in Auto Dealer Today.

The Consumer Financial Protection Bureau already has a “know before you owe” program aimed at simplifying mortgage disclosures and a few states have had “plain language” laws on the books for awhile, but there has been no discernible move by other states to follow the readability route — until now, she writes.

“Requiring that documents be written in language an 11th grader can understand seems perfectly reasonable. Requiring that legal documents setting forth the rights and duties of parties to a transaction involving tens of thousands of dollars be written in 11th-grade prose? Not so much,” she writes.

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