Key Metrics
14.7
Heat Index-
Impact LevelMedium
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Scope LevelNational
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Last Update2025-09-13
Key Impacts
Negative Impacts (8)
Event Overview
The bankruptcy of a subprime auto lender highlights the financial vulnerability of undocumented immigrants and the risks associated with loan-backed debt. While not expected to trigger a broader crisis, it underscores the precarious nature of credit access for marginalized communities and the potential for localized economic disruption.
Collect Records
Subprime Auto Lender Tricolor Files for Bankruptcy and Plans to Liquidate
Tricolor, a major subprime auto lender that specializes in buyers without social security numbers or credit histories, has filed for bankruptcy and plans to liquidate. This event is not expected to have the same widespread impact as the subprime mortgage lenders that contributed to the Great Recession. The failure of Tricolor negatively impacts its primary customers, often undocumented immigrants, and the major banks invested in its loan-backed debt. However, it is unlikely to cause a broader financial crisis similar to the subprime mortgage collapse in 2008. According to Pamela Foohey, a law professor and expert in auto finance and bankruptcies, subprime auto loans, even those with low documentation like those from Tricolor, are not expected to trigger a market collapse. The auto loan market is much smaller than the mortgage market, and auto loans are less leveraged and less frequently bundled into bonds compared to mortgages before the 2008 housing crash.