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When the Portland Trail Blazers went up for sale this year for the first time in three decades, local leaders were so determined to keep the team in Portland that they penned a widely publicized letter promising the National Basketball Association they’d work with whoever the new owner was to secure an overhaul of the team’s arena.
Fans cheered as a group of investors led by Texan Tom Dundon went all-in with a $4 billion bid for the team, which has now been accepted. Many speculated about what Dundon’s ownership of a newly successful National Hockey League team in Raleigh, North Carolina, would portend for Oregon’s oldest and biggest sports franchise.
There was no public discussion locally about the fact that Dundon created a company Oregon accused in 2020 of preying on residents through high-interest car loans they couldn’t afford. The state’s then-attorney general said that the business practices of Santander Consumer USA were “predatory and harmful and will not be tolerated in Oregon” as she announced Oregon’s piece of a $550 million multistate lawsuit settlement with the company.
In addition, Oregon is part of an ongoing multistate investigation into another national subprime lender for which Dundon has served in a leadership role, Exeter Finance. The Oregon Department of Justice confirmed to Oregon Public Broadcasting and ProPublica the state’s role in the investigation, the existence of which Exeter has disclosed in securities filings.
It’s unclear how these issues might affect the commitment of Oregon Gov. Tina Kotek and Portland Mayor Keith Wilson to a partnership, which could include tens or hundreds of millions in public money based on past arena projects in other cities. Spokespeople for both Wilson and Kotek declined to answer when asked if the elected leaders knew about Dundon’s history with regulators.
Mark Williams, a former Federal Reserve regulator who teaches finance at Boston University, said Dundon’s record is an important consideration.
“The money used to buy the Portland Trail Blazers is money that was built on predatory lending,” Williams said of Dundon. “He had an opportunity. He seized it. He made lots of profit. And how did he make that profit? He made it on the backs of low- and poor-credit individuals.”
Dundon’s purchase of the Blazers awaits approval from the NBA’s board of governors, which often takes months, before it can close.
OPB and ProPublica received no response after sending a summary of their reporting and a list of questions to Dundon, his investment firm, the public relations staff of his hockey team and the attorneys representing him in a bankruptcy dispute.
Dundon later answered to a text message seeking comment: “Unfortunately at this point in the process I am not available. Happy to speak with you after closing. Thx.”
Dundon left Santander Consumer in 2015. In biographical posts online and previous news media interviews, Dundon has described his approach to subprime lending as providing opportunities for people with bad credit to own cars and making sure borrowers receive a fair deal.
“Just because someone has bad credit doesn’t mean they are a bad person,” he told The Dallas Morning News shortly after leaving the company.
Santander Consumer declined to comment on Dundon. In a statement, the company said: “Operating in a highly regulated industry, we have robust processes in place that are designed to protect customers and adhere to all regulatory requirements and industry best practices.”
A spokesperson for Exeter Finance declined to comment. The company has said in filings that it is cooperating with the current investigation by states’ attorneys general.
The case that Santander Consumer settled with attorneys general in 2020 concerned more than 265,000 borrowers across the country, including 2,000 in Oregon. The settlement agreement said it did not constitute evidence of, or admission to, any of the state’s allegations against the company.
As for Exeter Finance, Oregon consumers have filed 23 complaints against it with the Consumer Financial Protection Bureau, all of which the agency listed as “closed with explanation” from the company.
One of those complaints was from AshLe’ Penn.
Penn, a single mother of three working as a staffing company account manager in 2021, needed a car. Her credit was bad. But a dealership was able to get her a loan on a 2014 Chrysler 300 through Exeter Finance.
Penn would have to make $511 monthly payments over 72 months, reflecting an interest rate of 28%.
“The interest rate was pretty insane,” she said in an interview. “But I needed a car so bad.”
Two years later, Penn found herself three payments behind and had been evicted from her apartment, she said. According to her consumer complaint, she was living in the sedan when Exeter sent a company to repossess it in January 2023. It was late at night, and she was parked outside her ex’s house. Her daughters watched from inside. She wrote that she spent the next 10-plus hours locked in her car, in a standoff with the repo agent, before enlisting a bankruptcy attorney who halted the repossession.
She recorded much of it on video, which she shared with Exeter.
“It was horrific. I mean, I cried. I cried for God,” Penn told OPB and ProPublica. “I was afraid to leave my car. I couldn’t get out of my car after that. I was just so afraid somebody was going to take it.”
Penn complained, arguing the law prohibits repossessing a car with someone inside, and demanded $150,000 in compensation. Exeter told her that it had done a thorough review, which concluded that she had failed to pay and that she was warned ahead of time her car would be taken away.
Penn’s version of events, Exeter wrote, could not be corroborated.
AshLe’ Penn at her home. Her consumer complaint said she was living in her car in 2023 when Exeter Finance tried to repossess the vehicle.
Credit:
Kristyna Wentz-Graff/OPB
Building an Auto Loan Giant Allegations of predatory lending would hardly stand out among NBA owners.
It is a billionaires’ club whose past and current members or their companies have been accused of housing discrimination, knowingly underwriting improper mortgages, exploiting prison inmates, making racist comments and engaging in sexual misconduct. The Blazers’ current owner, Jody Allen, settled lawsuits in which her company’s security guards accused her of sexual harassment and attempting to smuggle penguin skulls and giraffe bones out of Antarctica and Africa. All the owners, including Allen, have denied the allegations against them in court filings or in statements to the news media.
Dundon’s path to NBA ownership began at used car dealerships, where he worked in finance. In the mid-1990s, he and other former dealership workers co-founded the company Drive Financial Services. Dundon became its president and chief operating officer.
The company billed itself as “setting a new standard in the sub-prime lending industry.” Dealers appreciated that Drive Financial would loan money to people other companies wouldn’t, according to its website at the time, because it was able to “overlook negative credit histories such as charge offs, bankruptcies and repossessions.”
Finance experts who’ve studied the subprime lending industry say it offers a last resort for some people to own a car. Lenders set high interest rates in part to absorb the losses from those who can’t make payments. Even when lenders follow consumer laws, defaults are common.
“The alternative is, ‘Let’s just not issue loans to people that are very risky, and then they’ll never default,’” said University of Utah professor Mark Jansen, who has authored several papers on subprime loans. “But in a lot of places without public transport, no car means no job.”
In 2006, the Spanish company Banco Santander acquired Drive Financial and transformed it into Santander Consumer USA. Dundon kept a 10% ownership stake and a seat on its board of directors. He stayed on as CEO of the newly formed company.
Dundon emerged as a key figure in the growth of the subprime auto loan industry, said Williams, the Boston University finance professor.
Williams, who made car loans as a bank officer before working in financial regulation and risk analysis, now teaches classes about subprime car loans and other lending risks. He started studying car financing companies like Santander when he was researching a 2010 book about systemic risk in the finance industry. In 2015, he was one of the experts the New York Senate tapped for help with a report on the risks of the subprime auto loans industry.
Williams said Dundon “was one of the individuals that really grew the industry. Many would argue that he took it to a new level.”
Under Dundon, the value of Santander Consumer jumped from just over $600 million at the time of the acquisition to nearly $9 billion in 2014, according to Bloomberg.
That growth was built almost entirely with subprime borrowers. Filings with the Securities and Exchange Commission in Santander Consumer’s early years show the average credit score on its loans was below 540. Roughly two-thirds of its loans had interest rates over 20%.
A speaker bio for Dundon, posted by the MIT Sloan Sports Analytics Conference, said he was “able to impact lives by increasing access to reliable transportation for individuals with limited credit history” during his time at Santander Consumer.
But the company was also drawing consumer complaints.
Kenneth Dost was living in Scappoose, Oregon, when the housing market crashed and the architecture firm he worked with went under in 2007.
He was still struggling financially in 2010 when Santander Consumer took over the 15.85% Citi Financial loan that he’d used to buy his yellow Ford F-150 pickup. He said in his complaint with the Oregon Department of Justice that Santander Consumer agreed over the phone to lower his payments from $399 a month to $281. Dost said he then spent weeks going back and forth with the company trying to provide requested documents.
In November that year, Dost said, his daughter saw the yellow truck being hauled away shortly after she stepped off her school bus. After repossessing the Ford, Santander Consumer said in a letter to Oregon officials that the loan modifications Dost thought he received were actually subject to management’s approval and that Dost’s loan “did not meet the guidelines.”
In another letter, Santander Consumer told Oregon officials the documentation necessary to modify Dost’s loan was “not received in its entirety.” The letter also said Dost was 59 days delinquent by the time he sought the modification.
After selling the truck at auction, Dost said, Santander Consumer informed him he still owed more than $2,000. That included a fee for repossessing his truck.
“This ends up being a further windfall for Santander and more money they can bleed from us,” Dost told state investigators. “This is wrong.”
Dost became one of 24 borrowers Oregon’s Department of Justice named in an April 2012 “investigative demand” letter addressed to Dundon. The state ordered the Santander Consumer CEO to give testimony in person or else turn over the borrowers’ documents.
Santander chose the latter, and Oregon’s attorney general reached an “assurance of voluntary compliance” with the company in 2013 that required it to take steps to protect consumers and pay the state $25,000. The agreement said it was not an admission by the company that it violated the law.
There was more to come.
Leaving Santander Dundon knew pressure on his company from regulators was mounting.
In financial reports between late 2014 and early 2015, Dundon disclosed that in addition to a state attorneys general investigation, Santander Consumer also had received a subpoena from the U.S. Department of Justice and a notice from the Securities and Exchange Commission that the agency planned to investigate its lending practices.
In early 2015, the company reached a $9 million settlement with the U.S. Justice Department over allegations the company illegally repossessed military service members’ cars. The company neither admitted nor denied the allegations under the settlement. It was quoted as saying it fully cooperated with the government and had taken steps to improve its compliance with the law.
Around that time, a front-page story in The New York Times detailed how Dundon and others had amassed wealth by packaging risky auto loans made to low-income people and selling those loans as securities for hundreds of millions of dollars. Regulators said it resembled the way banks sold bundles of shoddy home loans before the housing bubble burst in the mid-2000s.
Dundon reassured stock analysts in April 2015 that “we’re too good to have a bust.”
But on the same earnings call, Dundon acknowledged problems, saying the company had “a lot of work to do” to meet regulatory expectations.
The Federal Reserve Bank of Boston was one regulatory agency looking into Santander Consumer. It found numerous deficiencies with the company. In late June 2015, Santander Consumer’s board of directors voted to accept a Fed enforcement action that required the company to submit written plans to improve its risk management and company structure.
Dundon was out as CEO the same day the enforcement agreement took effect, July 2, 2015. In his interview with The Dallas Morning News at the time, Dundon said that the Federal Reserve issues didn’t involve him and that he and Santander Consumer’s parent company “had different ideas about how to run a business.”
He netted more than $700 million in his separation agreement, which included cashing out his stock, SEC filings show.
A slew of multimillion-dollar legal settlements followed for Santander Consumer in the wake of Dundon’s departure: $26 million for allegations of “unfair, high-rate loans” in Massachusetts and Delaware; $12 million to the Consumer Financial Protection Bureau, which found it engaged in “deceptive acts” and violated consumer protection laws; and $550 million — the largest payout — with 34 attorneys general, including Oregon’s. The company did not admit wrongdoing in any of these cases.
After settling with state attorneys general, the company stated at the time it had “strengthened our risk management across the board” and called the lending that regulators had scrutinized a “legacy” issue.
After Santander Consumer Dundon used the money he made through Santander Consumer to make a wide range of investments, and he soon became known less for his tenure as an auto lender and instead as a prominent figure in recreational and professional sports.
Through a new firm, Dundon Capital Partners, he invested in Topgolf, an entertainment and restaurant chain built around golf driving ranges that was rapidly growing at the time. Along with forays into real estate and health care companies, he became the sole owner of the NHL’s Carolina Hurricanes in 2021.
Yet Dundon remained a player among subprime auto lenders.
Filings with the Securities and Exchange Commission show Dundon Capital Partners invested $100 million in Carvana in 2017, and sold much of the stock a year later. Almost half of the loans that Carvana issues are subprime, according to a report from the short-selling firm Hindenburg Research.
In 2023, Dundon Capital invested in subprime car lender Exeter Finance, according to the research firm Pitchbook.
Exeter Finance was founded in 2006 in Irving, Texas, a suburb of Dallas, the city where Dundon and others founded the company that became Santander Consumer. Exeter’s website shows that several former Santander executives took leadership roles at Exeter starting in 2015, while Santander Consumer was under state and federal scrutiny. Exeter is currently listed on Dundon Capital’s website as part of its portfolio, and a 2022 news release from Exeter identified Dundon as chairman of the board.
A 2024 investigation by ProPublica found that because of the way Exeter Finance handled loans, it sometimes made more money when borrowers defaulted than when they paid on time.
Exeter has settled allegations of unfair lending practices, paying more than $6 million combined to Massachusetts and Delaware. (The company did not admit wrongdoing in either case.) Meanwhile, it is under investigation by the attorneys general in 42 states, it said in a corporate filing this year. These include Oregon, a spokesperson for Attorney General Dan Rayfield confirmed.
Exeter has described the current multistate inquiry as an extension of demands for information that started in 2015. The company wrote that the initial investigation concerned its “origination, servicing and collection practices” and that it cooperated with state requests for documents.
For JT Cotter of Bend, Oregon, Exeter Finance was the only lender available when he bought a used Honda Pilot at Carmax in 2022 for $28,000.
Cotter, who works privately with families of children with special needs, said he had previously defaulted on a 2018 high-interest car loan from Santander Consumer.
“It demolished me,” he said.
When Cotter needed a new car and Exeter offered him a rate of 19%, he thought, “‘Oh, it’s just another Santander.’ But I didn’t know there was actually a connection.”
Exeter let him skip payments and extend his loan, a practice that ProPublica’s 2024 investigation found was fundamental to the company’s business model. (The company said at the time that it communicates with customers to ensure they know the costs involved with extensions.)
Cotter said what he didn’t know was that the payments Exeter let him skip were moved to the end of the loan, increasing the interest and fees he had to pay. By 2024, his $731 monthly payment went entirely toward interest, according to an Exeter billing statement reviewed by OPB and ProPublica. Exeter repossessed the Pilot eight months ago.
He never filed a complaint with the state Department of Justice because, he said, he didn’t know it was something he could do.
Cotter now drives a Subaru. He said he saved up and paid cash for it.
A New Arena
Portland’s Moda Center arena in 2025. Memorial Coliseum, behind it, was the Blazers’ home until the 1990s.
Credit:
Brooke Herbert/OPB
Portland’s city-owned Moda Center arena has been the home of the Trail Blazers since it opened in 1995 under the name the Rose Garden, replacing the city’s aging Veterans Memorial Coliseum.
The team’s future in the Rose City wasn’t a prominent debate in Portland until Allen, the owner, put it on the market in May. Asked to comment on the team’s future in light of a potential sale, NBA Commissioner Adam Silver declared to reporters that Portland “likely needs a new arena.”
“That will be part of the challenge for any new ownership group coming in,” Silver said at the time.
Others echoed Silver’s sentiment. Marshall Glickman, whose father founded the Trail Blazers in 1970, said during an August interview on OPB’s “Think Out Loud” that any new owner would have “extraordinary leverage” over the city and the state to pay for a new or renovated arena. “And that leverage comes from the threat, which may be spoken or it may not be spoken, but the portability of the team that it could leave.”
Glickman started an organization, Rip City Forever, to build public support for keeping the Blazers in Portland. He declined to comment further but said his statements during the “Think Out Loud” interview were not directed specifically at Dundon, whose name had not yet surfaced.
Cities rarely come out ahead when they put tax dollars into these stadium projects, a group of researchers concluded in 2022 after examining more than 130 economic studies of publicly financed stadiums. Any public benefits from increased foot traffic, new visits to nearby businesses or heightened civic stature were too small to justify the amount the public spent, the review found.
Wilson and Kotek, the Portland mayor and Oregon governor, stepped up in a big way nonetheless. In their letter to Silver, they said they’d heard his concerns about the Blazers arena “loud and clear” and “fully support renovating the Moda Center to become a point of pride for the Blazers and for our city.”
“We are prepared to explore the public-private partnerships needed to make it happen,” they concluded.
Then, on Sept. 12, the current Blazers owner announced that the franchise had accepted Dundon’s purchase offer.
Dundon has not commented on the Blazers acquisition since, but U.S. Sen. Ron Wyden of Oregon said he’d spoken with him just before the bid became public. “He sounded very excited about the team’s future being here in beautiful Portland,” Wyden told reporters.
As in Portland, there were concerns the NHL’s Hurricanes would leave Raleigh for a bigger market when Dundon bought the team. In 2023, the Hurricanes signed a long-term lease in the city, announcing the development of a billion-dollar arena and surrounding entertainment district. The deal included $300 million in public money.
Oregonians who borrowed money from companies linked to Dundon voiced emotions ranging from dismay to disgust when they learned their tax dollars might go toward supporting Dundon’s latest investment.
“Great,” Dost said. “Making a partnership with the devil, essentially is what that is.”
Penn, who was homeless when Exeter sent a repo company to take her car away, said she considers herself a Blazers fan. She’s never made it to a game in person, but her kids went on a school-sponsored trip to the Moda Center this year.
She fended off repossession back in 2023, but the car broke down a few months later. She couldn’t afford to fix it and stopped trying to make payments. She eventually found Section 8 housing, but without a vehicle, she said her kids had to stop playing soccer and basketball because she had no way to get them to practices and games.
Penn said she wonders if the people who run Exeter know what’s happened to borrowers like her.
“I’ve seen their executive team, and they’re definitely eating and feeding their families,” she said, having looked the company up online, “and I think it’s definitely at the expense of others not being able to.”
Without a car, Penn says her kids had to stop playing soccer and basketball because she had no way to get them to practices and games.
Credit:
Kristyna Wentz-Graff/OPB
Doris Burke and Mariam Elba of ProPublica contributed research.
This article was produced for ProPublica’s Local Reporting Network in partnership with Oregon Public Broadcasting . Sign up for Dispatches to get our stories in your inbox every week.
This article was produced for ProPublica’s Local Reporting Network in partnership with Oregon Public Broadcasting. Sign up for Dispatches to get our stories in your inbox every week.
Doris Burke and Mariam Elba of ProPublica contributed research.
Doris Burke and Mariam Elba of ProPublica contributed research.
