Santander Consumer USA is one of the fastest-growing companies in the automotive finance sector. Eldridge Burns, chief legal officer, has helped guide the company since joining it in January 2007. Now, Santander Consumer USA has a managed assets portfolio of $53 billion, as of December 31, 2015, as Burns continues to lead legal matters for the company.
A BRIEF HISTORY OF TIME
Santander Consumer USA Holdings began originating retail installment contracts and now has millions of customers across all credit grades.
The company is founded by a group of entrepreneurs, including the current CEO and chairman.
Partnership with FirstCity Financial is established to form FirstCity Funding, a nonprime auto-finance company.
FirstCity Financial sells its interest in Drive to HBOS plc and Drive Management LP, kicking off a period of rapid growth for the company.
HBOS plc and certain members of Drive Management LP sell interest to Banco Santander S.A.
Chrysler Capital auto purchase and lease financing program launches, and Santander Consumer USA becomes a public company the year after.
Burns relates about when he started at Santander Consumer USA eight years ago. “At the time we had about 1,000 employees and about eight people total for legal and compliance. Today we have more than 5,000 employees,” he says. “The legal team has more than fifty employees and compliance, which is now separate, has about fifty-five. We have gone from a relatively small private company to a much larger public company in the eight years I’ve been here.”
He emphasizes the primary function and business of the company. “Our focus is automotive finance. Our strategy is to continue leveraging our efficient, scalable infrastructure and data to underwrite, originate, and service profitable assets,” Burns says. “We continually work to optimize the mix of retained assets versus assets sold and serviced for others. We are also the preferred lender for FCA US LLC—FIAT Chrysler Automobiles, commonly known as Chrysler. That’s a differentiator for us, and we have continued presence in prime markets through Chrysler Capital, which we operate.”
In January 2014, Santander Consumer USA went public. This was a progressive transformation for the company, but also created new challenges. Burns explains: “When you have public shareholders, there are an exacting set of standards—across the business—that companies are expected to have mastered, starting on day one of your IPO. We have had to bring in more expertise, and our focus now primarily centers on extensive communication with the business.”
That successful transition and continued business growth is all about teamwork. “Surrounding yourself with terrific people is the key to navigating a company through challenges,” Burns says. He gives credit where it’s due. “We are fortunate to have good, smart, and experienced lawyers on our team, strong support from our parent organization, and an outstanding board of directors. This collective leadership is invaluable. You also need to be properly resourced. Our compliance team, for example, was a small group in 2007. Today, we have more than fifty compliance associates and the number is likely to grow.”
There’s a great deal of trust among the members of the legal team, Burns says. “We all bring unique experiences and special areas of practice to the table. We collaborate, of course, but we also trust each attorney to be the subject-matter expert is his or her field,” he explains. “We really don’t have time to second-guess each other or to micromanage our colleagues’ tasks. We know that we are all working for the good of the company, and so we put our heads down and work hard.”
Through his tenure at Santander Consumer USA, one of the main changes has been the growth of the company. “We operated with just a couple of lawyers for several years and we handled most matters ourselves, calling upon outside counsel for specialized services—for example, intellectual property, litigation, etc.,” Burns says. “Today there are thirteen attorneys, several paralegals, people managing governance and litigation, corporate secretaries, etc. There is a breadth and depth to the legal team that has evolved as our business has evolved.”
Burns is proud of the company’s successes, citing one in particular: taking the company public in 2014. “When I joined the company in 2007, even though it had bank oversight, it still operated much like a startup in many ways. The company was strategic, aggressive, yet incredibly efficient,” he says. “But there was work to do on the corporate governance front. We formed a new management team and we focused on establishing the proper controls, processes, and structure that made it possible for Santander Consumer USA to have one of the largest IPOs of 2014.”
Another point of pride for Burns is the acquisition work from 2008 to 2011. “The economy was in recession and many of our peers—and many institutions that were larger than us—sought to exit the auto finance space,” he says. “We completed five notable acquisitions during this time, which gave us significant gains in terms of data and some key personnel. At a time when most auto finance providers were contracting, we were growing. It was a lot of work, but it was tremendously rewarding work.”
For Burns, teamwork is crucial. “Culture is everything. Your people need to complement and respect one another, and work productively—often under periods of intense work or stress,” he says. “Take time to understand each person’s leadership style before hiring them, and make sure they will bring value to the existing group.”