Since TriColor was the lender and not a bank, I am guessing that after the repossession of the vehicle they are not on the hook for the remaining payments.
If I understand correctly, Tricolor “pledged” the loan portfolio to multiple banks. I think this is like selling the loan at a discount for the cash now. If that’s the case, then the loan is collectable by the new owner, the multiple banks. All of the banks would need to agree not to pursue loan collection. We all know how wonderful and humane bank loan departments are...
Of course, a judge could order them not to collect, but this part of the case would need to be brought to a court, and I don’t see how that would happen. Banks have lawyers. This level of car buyer does not.
The credit of the buyer has to be marked as payed as agreed. The repossession had nothing to do with missed payments.
I understand that Tricolor was doing high interest auto loans to illegal immigrants.
And investors pounced on that high interest, greed can make people stupid. This is what you get when you loan money to people who are not crediworthy. Lets hope no pensions bought any of that junk.
Doesn't appear to be correct based on the top posts. It looks like they sold the cars on credit, made the loans, and acted as servicer. They then sold the loans to the banks and per this, sold the same loan to more than one bank, " where identical loan portfolios were pledged to different banks".
If the reports are accurate, it doesn't sound like a viable long-term scam.
It's going to be a mess to try to untangle, and there's no pot of gold at the end of the rainbow. If you are JPM or Fifth Third or Barclay's you might be better with taking a $200 million write off and cutting your tax liability instead of spending additional millions chasing a ghost.
JPM's net income for 2024 was roughly $58.5 billion, 5/3's was only $2.1 billion, Barclay's £8.1 billion. If there were smaller banks on the hook, it could get messy for them with an unpleasant conversation with a regulator.