In this episode of the Consumer Credit Matters podcast, host William Black and guest Rod Dubitsky (aka The People's Economist) discuss the recent Chapter 7 bankruptcy filing of Tricolor, a subprime auto lender. They explore the unique business model of Tricolor, the implications of fraud allegations, and the role of securitization and warehouse lending in the company's downfall. The conversation also touches on the broader implications for the subprime auto lending market and the economic pressures facing borrowers.

Chapters

00:00 Introduction to TriColor's Collapse

09:28 Straight to Chapter 7 Bankruptcy

12:24 Tricolor's Business Model

18:15 The Role of Securitization

31:40 The ABS ratings

44:29 Economic Headwinds or Immigration Policy?

57:22 The Role of the Backup Servicer

01:03:08 Social Bonds and ESG Considerations

01:08:08 Idiosyncratic vs. Systemic