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Auto lender and dealer Tricolor catered to Hispanic community and customers with low or no credit.

Irving-based subprime auto lender and dealer Tricolor Holdings filed for bankruptcy Tuesday and plans to liquidate its assets, according to court filings.

The case comes after allegations of “significant fraud.” The Financial Times reported Wednesday that the U.S. Department of Justice was investigating.

Tricolor, through its three brands Tricolor Auto, Ganas and Ganas Ya, operates over 60 dealerships across Texas, California, the Southwest and Illinois. The company specializes in providing auto loans to members of the Hispanic community with little to no credit history, including those without Social Security numbers.

Combined, Tricolor and Ganas have provided more than $5 billion auto loans, according to a June press release.

Subprime loans of this kind usually use temporary credit lines known as warehouse facilities before being packaged into asset-backed securities, with major banks providing the majority of the debt.

‘Significant fraud’

On Tuesday, Fifth Third Bancorp, listed as one of Tricolor’s secured lenders, reported to the U.S. Securities and Exchange Commission it had “recently discovered alleged external fraudulent activity at a commercial borrower ... associated with their asset-backed finance loan.”

The associated loan holds an outstanding balance of $200 million, per the filing.

Speaking at a Barclays conference Wednesday, Fifth Third CEO Tim Spence said that based on a review of the borrower, “It appears there’s significant fraud in the collateral file that was used to support borrowing base in all their warehouse facilities, as well as the audited financial statements of the company.”

Fifth Third and Spence did not initially name the borrower, but the bank confirmed that Tricolor is the borrower referenced in an email Thursday to The Dallas Morning News. The SEC filing indicated Fifth Third was working with the “appropriate law enforcement” in connection with the matter.

Other secured lenders include JPMorgan Chase, Barclays, and Origin Bank. Origin has $30 million in total loan commitments to Tricolor and counted Tricolor CEO Daniel Chu among its board members until Sunday.

“We have had a nearly two-decade relationship with Daniel and his company, and we appreciate his contributions to Origin since joining the Board in 2022,” Origin said in a statement. “We are currently evaluating the status and valuation of our collateral along with any necessary additional provision for credit losses pertaining to the Tricolor loans. We plan to pursue all available remedies to protect our interests.”

Tricolor filed for Chapter 7 bankruptcy, which includes liquidating the firm’s assets. According to its bankruptcy filing, Tricolor had between $1-10 billion in assets and the same for liabilities. It listed more than 25,000 creditors.

A lawyer at Sidley Austin filed on behalf of Tricolor, but the firm is no longer representing Tricolor as of Thursday.

While Tricolor’s consumer-facing websites are still operational, tricolorholdings.com appears to be down. Spanish language outlet Univision reported last week that the company was furloughing 80-90% of its workforce.

On Thursday during listed business hours, a Tricolor Auto location in southeast Dallas appeared to be closed. Less than a dozen cars, presumably for sale, were parked outside in the fenced off property. The property’s mechanized gate did not open once in about an hour of observation.

Multiple attempts to reach Chu and the company were unsuccessful. Kroll Bond Rating Agency, a major credit rating agency, has placed all outstanding Tricolor-related ratings on “Watch Downgrade” and wrote Wednesday it has not been able to make contact with the company.

https://www.dallasnews.com/business/autos/2025/09/11/d-fw-auto-lender-dealer-files-for-bankruptcy-amid-fraud-allegations-from-major-bank/