A lot of strange goings on here. Borrowing money and lending to people who had no jobs or weren’t even citizens apparently:
The plot thickens at Tricolor Auto after ABC13 first reported on Thursday that court documents revealed the company had filed for bankruptcy. Now, one of its lenders confirms the dealership is being investigated for fraud.
I would imagine that they made loans to undocumented workers. Those workers were suddenly gone and not paying bills. This left them in a cash flow crunch.
I would not be surprised to see more fallout in unexpected places.
Cheers
Qazulight
From March…
Tricolor has now completed sixteen well-received ABS transactions and is the only issuer in all of subprime auto ABS to be certified by the US Treasury as a Community Development Financial Institution (CDFI)…
The more than 59 million Hispanics in the United States would collectively rank as the fifth largest economy in the world. Yet, according to the FDIC National Survey of Unbanked and Underbanked Households, 32% of this US Hispanic population has no or limited access to mainstream credit…
To date, Tricolor, a U.S. Department of the Treasury certified CDFI, has disbursed over $5 billion in affordable auto loans as part of its mission to empower underserved Hispanics…
DB2
That’s weird. The link is from March, but the header states December. Common mix up with how dates are written in English and Spanish.
Anyhoo, that was a bold move right as mass deportation was getting ramped up. By bold, I mean stupid.
Sixteen sounds like a lot…but that’s only assuming you don’t use the same auto loans for collateral on multiple transactions.
“Roughly 40% out of some 70,000 active Tricolor loans — which were used as collateral for bank warehouse lines and asset-backed securitizations — contained attributes identical to those of at least one other loan, including vehicle identification numbers, according to people involved in the probe, who asked not to be identified discussing sensitive information.”
So it wasn’t really “loans to immigrants”, it was simple (if complicated) fraud. Using the same collateral for multiple loans to (mostly) non-bank private equity, who aren’t quite as diligent in the “due diligence” department as banks are.
I recall a scandal in the 50’s or 60’s that involved using the same railway cars over and over as collateral by painting over the registration numbers. And there was the double billing of the Credit Mobiliere escapade with the building of the Intercontinental Railroad.
But count on people to blame the “little folks” instead of the greedy guys perpetrating a massive fraud. So it’s been all though history - and it seems to work, too, at least on the gullible.
According to reports, several billions of dollars has vanished. Poof. Must be them feriners!