Tricolor court proceedings begin, fraud investigation confirmed

A federal investigation into subprime auto lender Tricolor Holdings was confirmed as court proceedings began last week.  

In a court hearing on Oct. 3, Tricolor’s lawyers confirmed that federal law enforcement and regulatory agencies are investigating the buy here, pay here dealer and subprime lender for alleged misconduct and alleged systemic fraud. 

Since Texas-based Tricolor’s Chapter’s 7 bankruptcy filing on Sept. 10, the company’s bond prices have plummeted, signaling that investors believe there is an increased risk of losses, particularly in riskier tranches. 

Meanwhile, third-quarter sales among auto makers climbed as OEMs pushed incentives and consumers pulled ahead their EV sales prior to elimination of the $7,500 federal tax credit on Sept. 30. 

In regulatory news, powersports lenders and dealers are in an interesting position amid the shifting compliance landscape. 

The powersports industry has long been overlooked by regulators, with a fraction of complaints the Consumer Financial Protection Bureau received since 2011 directed at the powersports industry.  

But with the pullback at the CFPB and state regulators and other agencies like the FTC ramping up enforcement, it’s imperative that lenders and dealers don’t do anything to garner enforcement actions.  

In this episode of the “Weekly Wrap,” Auto Finance News Editor Amanda Harris, Senior Associate Editor Truth Headlam and Associate Editor Aidan Bush discuss Tricolor proceedings, OEM third-quarter sales and powersports compliance for the week ended Oct. 3. 

Auto Finance Summit, the premier industry event for auto lending and leasing, returns Oct. 15-17 at the Bellagio Las Vegas. Learn more about the 2025 event and register here. 

This episode is sponsored by The Work Number by Equifax.  

Editor’s note: This transcript has been generated by software and is being presented as is. Some transcription errors may remain.