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Related-Party Transactions
3 Months Ended
Mar. 31, 2014
Related-Party Transactions

11.

Related-Party Transactions

Related-party transactions not otherwise disclosed in these footnotes to the consolidated financial statements include the following:

The Company has a line of credit agreement with Santander — New York Branch (Note 5). Interest expense on these lines of credit totaled $24,874 and $6,494 for the three months ended March 31, 2014 and 2013, respectively. Accrued interest was $10,119 and $11,435 at March 31, 2014 and December 31, 2013, respectively.

During the first quarter of 2014, the Company established a line of credit agreement with SHUSA (Note 5). Interest expense on this line of credit totaled $363 for the three months ended March 31, 2014. Accrued interest was $213 as of March 31, 2014.

The Company has a letter of credit facility with Santander — New York Branch (Note 10). Letter of credit fees for the used and unused portions, which are included as a component of interest expense, totaled $125 and $144 for the three months ended March 31, 2014 and 2013, respectively. Accrued fees totaled $125 and $128 at March 31, 2014 and December 31, 2013, respectively.

The Company has derivative financial instruments with Santander and affiliates with outstanding notional amounts of $12,580,549 and $10,461,378 at March 31, 2014 and December 31, 2013, respectively (Note 7). Interest expense on these agreements, which is included as a component of interest expense, totaled $8,881 and $4,874 for the three months ended March 31, 2014 and 2013, respectively.

During 2013, the Company sold approximately $222,384 of the Company’s receivables from dealers to SBNA. The Company continues to service these loans but the loans are not subject to the servicer performance payment that applies to dealer loans originated under the SBNA flow agreement, described in Note 10. Servicing fee income recognized on receivables from dealers sold to SBNA or originated by SBNA totaled $1,265 for the three months ended March 31, 2014, including $464 in servicer performance payments on loans originated by SBNA. Other information on the dealer loan portfolio serviced for SBNA as of March 31, 2014 and December 31, 2013 is as follows:

 

 

March 31,
2014

 

 

December 31,
2013

 

Total serviced portfolio

$

676,856

 

 

$

513,684

 

Cash collections due to owner

$

8,830

 

 

$

6,941

 

Servicing fees receivable

$

997

 

 

$

817

 

 

The Company also has agreements with SBNA to service auto retail installment contracts and recreational and marine vehicle portfolios. Servicing fee income recognized under these agreements totaled $865 and $6,214 for the three months ended March 31, 2014 and 2013, respectively. Other information on the serviced auto loan and retail installment contract portfolios for SBNA as of March 31, 2014 and December 31, 2013 is as follows:

 

 

March 31,
2014

 

 

December 31,
2013

 

Total serviced portfolio

$

1,096,905

 

 

$

1,175,566

 

Cash collections due to owner

$

32,698

 

 

$

32,831

 

Servicing fees receivable (refundable)

$

661

 

 

$

(3,163

)

During 2014, the Company entered into a flow agreement with SBNA whereby SBNA has the first right to review and approve Chrysler Capital consumer vehicle lease applications. SCUSA may review any applications declined by SBNA for the Company’s own portfolio. The Company provides servicing and receives an origination fee on all leases originated under this agreement. Origination and service fee income recognized on leases originated and serviced for SBNA totaled $3,685 and $94, respectively, for the three months ended March 31, 2014. Other information on the consumer vehicle lease portfolio serviced for SBNA as of March 31, 2014 is as follows:

 

Total serviced portfolio

$

241,878

 

Cash collections due to owner

$

260

 

Origination and servicing fees receivable

$

4,780

 

Lease originations receivable

$

16,123

 

Produban Servicios Informaticos Generales S.L., a Santander affiliate, is under contract with the Company to provide professional services, telecommunications, and internal and/or external applications. Expenses incurred, which are included as a component of data processing, communications and other expenses, totaled $22 and $38 for the three month periods ended March 31, 2014 and 2013, respectively.

During the three months ended March 31, 2014, the Company originated $704 in unsecured revolving loans under terms of entered into a Master Services Agreement (MSA) with a company in which it has a cost method investment and holds a warrant to increase its ownership if certain vesting conditions are satisfied. The MSA enables SCUSA to review credit applications of retail store customers.

The Company paid expenses totaling zero and $381 for the three months ended March 31, 2014 and 2013, respectively, on behalf of the former managing member of the investment partnerships described in note 8. The former managing member is an investor in Auto Finance Holdings.