Banks Brace for Impact as Tricolor Files for Chapter 7

Sep. 10, 2025 | |

Bloomberg reports JPMorgan Chase & Co., Fifth Third Bancorp and Barclays Plc are among the warehouse lending partners facing hundreds of millions of dollars in losses as used vehicle retailer and subprime lender Tricolor Holdings enters bankruptcy proceedings.

On Wednesday, Tricolor filed a Chapter 7 petition with the U.S. Bankruptcy Court for the Northern District of Texas in Dallas, where the company is based. More than 25,000 creditors are listed in the filing.

Launched in 2007 and doing business as Tricolor Auto, the company has overtly targeted borrowers who possess neither a Social Security number nor a credit profile.

“The company’s focus on loans to undocumented immigrants drew scrutiny earlier this year, with some investors concerned that the business model came with heightened risk amid President Donald Trump’s immigration crackdown,” the Bloomberg report notes.

Read more at Bloomberg