SCUSA CFO talks steady underwriting, growth focus

Santander Consumer USA is taking a steady approach to underwriting and pricing amid fluctuating consumer demand, auto tariffs and worsening credit performance. “We take a through-the-cycle approach when we're looking at pricing risk,” Chief Financial Officer Erik Laney said during a fireside chat last week at Auto Finance Summit East 2025 in Nashville, Tenn. “The day’s events generally aren’t driving us to make immediate underwriting changes. We're taking a data-driven approach and seeing how loans are performing.” [caption id="attachment_58351763" align="aligncenter" width="1024"] Erik Laney, chief financial officer at Santander Consumer USA, talks with Royal Media CEO JJ Hornblass at Auto Finance Summit East 2025. (Courtesy/Auto Finance News)[/caption] Dallas-based Santander Consumer USA (SCUSA) is keeping an eye on interest rates as tariffs contribute to fluctuations in spreads and the industry eyes a potential “soft landing” for the economy, Laney said. “We're doing this balancing act right now where you’ve got a lot of fluctuation in base rates,” he said. “What everyone's hoping for is that the [ Federal Reserve ] can get inflation in check, lower rates gradually, and during that process, there won't be a spike in unemployment.” “We're doing this balancing act right now where you’ve got a lot of fluctuation in base rates." -- Erik Laney, CFO, SCUSA The lender is also working to drive portfolio growth by building out its third-party financing relationships with manufacturers. SCUSA had a portfolio of $5 4.9 billion at yearend 2024, making it the ninth-largest auto lender by outstandings, according to the latest Big Wheels Rankings data . Laney joined Auto Finance News for a one-on-one discussion during the conference. What follows is an edited version of the conversation. Auto Finance News : How are SCUSA’s origination activity and credit performance trending? Erik Laney : We're seeing strong originations through our core channel through franchise dealers. We made a lot of underwriting changes in 2023, and we haven't made any dramatic changes since then, which has allowed us to be in a steady state over the last few years. We're not doing anything like pricing in higher car prices because of tariffs ; it's hard to react to what the macro factors are going to be. From a credit loss perspective , we still see the consumer hanging in there. We’re seeing elevated delinquencies in auto, but that's a unique phenomenon to the auto business because it was disproportionately impacted by the events through COVID — higher prices, higher rates. If you look at the credit card market, delinquencies are at historical lows there, which is our canary in a coal mine that we look at regularly. It seems like credit is good from the gross loss perspective. "If you look at the credit card market, delinquencies are at historical lows there, which is our canary in a coal mine that we look at regularly." -- Erik Laney, CFO, SCUSA We have different channels we originate. You must be a bit more cautious at this moment with nonprime customers given the fact that they are more exposed to things like inflation and their discretionary spending is going to be hit earlier. But overall disposable income relative to debt loads is at a healthy level. AFN : What changes do you foresee for this year amid market circumstances? EL : From the remarketing side, we've got a whole team that manages that. They're going to be disciplined in terms of how they're selling in the market, how they're going to refurbish cars and make sure that they get the best of that investment that's on our balance sheet. I don't foresee any major underwriting changes . There's a lot of muscle memory in the industry from COVID and a lot of the things that we're talking about — whether that's higher car prices or higher interest rates or stress on consumers through higher inflation — we have the playbook for that. We've learned that there are certain pockets that we cannot underwrite at certain payment levels. AFN : SCUSA was the private label captive finance provider for Stellantis NV ahead of the formation of Stellantis Financial Services. Now that the agreement is set to end this year, how has that relationship shifted? EL : We had a long-term relationship with Stellantis, and they’ve been ramping up Stellantis Financial Services in the last few years. The process is complete in terms of our relationship with them. Our relationship will end this year and we’re working on wrapping it up with them. In terms of new capital deployment areas, it's given us an interesting place to be in the market because we have free capital to put to work. We're looking to establish new relationships with OEMs , captives of OEMs or large dealer groups. We’ve seen a lot of growth in our originations through franchise, non-OEM affiliated dealers, probably about 20% over the last few years, with much of the focus on prime and near prime originations in the used-vehicle space. AFN : What are you watching closely from a regulatory perspective? EL : We haven't seen much of a change in the regulatory environment . We’ve seen certain agencies stand down from an enforcement perspective. We’ve been on a 10-year journey building out our regulatory practice and bringing in the right people to make sure that regulatory interactions are at the top of their mind when they’re running the business. It’s ingrained in the business. Find more coverage from Auto Finance Summit East 2025 here.

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SCUSA CFO talks steady underwriting, growth focus

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