Suntrust Auto Loans has been in the headlines lately, having been slammed for the loss of its $1.3bn acquisition of Suntrust Insurance.
In the latest case, the bank has been accused of misleading investors by stating that the loan would be repaid if a customer’s bank account met certain requirements, including paying off the principal and interest on the loan within 30 days.
But the lender hasn’t been the only bank to fall foul of the SEC’s new disclosure requirements.
Suntrust was also accused of misleading customers about their ability to refinance their auto loans.
The SEC says that while Suntrust misrepresented its ability to provide a refinancing option, it did not mislead investors about the ability to pay off the loan in full within 30-days.
And now, the SEC says SunTrust is guilty of misleading people about its ability and ability to repay the loan.
According to the SEC’s filing, Sunvision was able to refloat its loans through its “pre-qualified reverse refinancing facility” but failed to disclose the fact that customers had a 20% APR on their auto loan at the time.
As a result, the lender could have paid off its loan with less than $1,000, and the customer could have owed more than $100,000.
That’s not the only SEC case against Suntrust.
Last month, another Suntrust lender, JPMorgan Chase also was accused of deceiving investors about how its loans were paid off.
While the bank claimed that it was making payments from its auto loan account for each month a customer lived in the country, it also misled investors by claiming that the bank was not in a position to make payments at the end of the month. Investors were told that the loan would not be paid off until the bank met certain benchmarks, including keeping the balance of the loan at least $1m and meeting a certain repayment schedule.
Jury selection was postponed until November 2017 to allow time for Suntrust to settle its fraud charges.
Meanwhile, there have been numerous other accusations of fraud by Suntrust auto loans, including accusers who claim that the lender is making a lot of loans and that it’s being pressured by lenders to make more loans.
According to a senior SEC officer, “There are a number of allegations that Suntrust has been making that are very credible, but that are not true,” according to a report in the Financial Times.
This isn’t the first time Suntrusts auto loans have been accused by regulators of being deceptive.
During 2008, more than 20 lawsuits were filed against SunTrust for misleading investors, claiming that its loans had a 20 percent APR.
For instance, an investor in a car loan at Suntrust told the SEC that his loan would only be paid for $1 million if he met certain criteria.
On the other hand, a lender at Suntrust claimed that the $1 million loan would go to $1 billion.
It’s not the first accuser to accuse Suntrust of misleading consumers about their financial futures.
A former Suntrust employee claimed that the company was pushing borrowers to pay the highest interest rates because it was trying to attract customer interest by failing to tell them about the loan’s repayment options.
Earlier this year, The Wall Street Journal reported that Suntech was facing a $6bn fraud suit over claims that it made a lot of auto loans and did not tell customers about the terms of their loans.
Suntech said that it had not inadvertently misled investors.
We have reached out to Suntrans Financial and Suntrust for comment.
What do you think of the Suntrust case?