This Major US Auto Lender Went Bust as Record Number of Americans Lag on Debt Payments. How to Protect Yourself Now
Americans are struggling to pay their bills, and the collapse of a major auto lender shows just how dire things are getting.
Tricolor Holdings, a Dallas-based used-car dealer that made loans to people with poor credit, filed for bankruptcy on Wednesday. The company operated 65 dealerships across six states and specialized in selling cars to Spanish-speaking buyers who couldn't get loans anywhere else.
The company's failure comes at a time when millions of Americans can't keep up with their car payments. Right now, 6.6% of people with bad credit are at least 60 days behind on their auto loans — the highest level since tracking began according to an Axios roundup [1]. Even people with good credit are falling behind more often than they did last year.
The warning signs were everywhere
Tricolor's bankruptcy didn't happen overnight. The company, which had been praised by major investors like BlackRock for helping underserved communities, was actually in deep trouble.
Fifth Third Bank discovered what it called "fraudulent activity" at Tricolor and took a hit of up to $200 million investigative reporting from Barron's revealed [2]. JPMorgan Chase faces similar losses, with about $200 million at risk [2]. Origin Bank has another $30 million tied up with the failed company [2].