Quick Answer: New documents obtained by ProPublica and Oregon Public Broadcasting reveal that billionaire Tom Dundon personally directed Santander Consumer USA to waive proof-of-income requirements for car loans in 2013 — a practice that Oregon and 33 other states later called “predatory and harmful” in a $550 million settlement. Dundon is now the incoming owner of the Portland Trail Blazers, and state and local officials are committing up to $870 million in taxpayer money to renovate the team’s arena.
Expert Context: I ran a credit counseling organization and watched how the lending machine works from inside the industry. The pattern ProPublica documented at Santander Consumer — waiving income verification to close more deals, then pricing the extra risk into fees and interest rates — is the same playbook I’ve watched destroy families for three decades. The lender profits whether you keep the car or not. The borrower loses either way.
What the Documents Show
According to internal company emails obtained through a records request by ProPublica and Oregon Public Broadcasting, Dundon — then CEO of Santander Consumer USA — initiated a plan in January 2013 to stop requiring car dealers to prove borrowers could afford their loans.
Dundon emailed two senior employees with a direct instruction to begin waiving proof-of-income requirements more frequently. Within two weeks, the company’s marketing and sales teams were developing promotional materials to advertise this new policy to car dealers.
Every weekday I read the enforcement actions, filings and fine print the outlets skip, and turn them into the one or two moves that actually improve your position — a rate worth moving for, a fee you can refuse, a deadline to beat before it costs you.
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Santander Consumer’s own chief risk and compliance officer, Michele Rodgers, raised red flags about the plan on January 21, 2013, identifying potential concerns about anti-money laundering laws, identity theft laws, and fair lending requirements. According to a regulatory slide presentation summarizing the investigation, Dundon continued pushing the policy after these internal warnings — a pattern regulators characterized as “ignoring this internal concern.”
How the Scheme Worked
According to ProPublica’s reporting, the business model was straightforward: stop requiring proof that borrowers could afford their car loans, then charge higher fees and interest rates to cover the increased risk of default. The lender profits regardless of whether the borrower keeps the car.
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Oregon’s 2020 legal complaint against Santander Consumer alleged that many customers took out loans under the “false pretense” that they were acquiring a car they’d eventually own, when in fact the loan terms were so onerous they would “almost certainly” result in default and repossession.
Oregon’s current Attorney General Dan Rayfield stated: “Proof of income requirements exist for a reason — they protect borrowers from being sold loans they cannot afford.”
Common belief: “Subprime auto lenders help people with bad credit get cars they need.”
Reality: When a lender deliberately removes the safeguard that confirms a borrower can afford the loan, they aren’t helping anyone get a car — they’re setting up a transaction designed to extract fees and interest before the inevitable repossession. The borrower loses the car, the down payment, and every payment they made. The lender has already priced in the default. As a former Federal Reserve regulator quoted in ProPublica’s investigation put it: waiving proof of income is “counter to just sound banking practices.”
The Settlement — and What Came Next
In 2020, Santander Consumer agreed to a $550 million settlement with 33 states and the District of Columbia. The company did not admit wrongdoing. (This pattern of hidden fees and predatory auto lending isn’t unique to Santander — 13 state attorneys general recently sued OneMain Financial for secretly packing loans with junk fees.) Dundon had left the company in 2015 with a separation agreement worth more than $700 million, according to SEC filings cited by ProPublica.
Several former Santander Consumer executives — including the compliance officer who raised concerns and two employees Dundon originally emailed about waiving income verification — are now senior executives at Exeter Finance, another subprime auto lender. Oregon’s Attorney General is currently working with other state AGs on an investigation into Exeter. Dundon’s website lists him as an investor in Exeter and he has served as chairman of its board.
Now: $870 Million in Taxpayer Money
Dundon’s deal to purchase the Portland Trail Blazers is expected to close on March 31, 2026. Oregon lawmakers have approved $365 million in state funding to renovate the 30-year-old Moda Center. Combined with city and county money, the total public commitment has reached $870 million — far exceeding what the team originally requested.
According to ProPublica, a consultant for Dundon’s ownership group initially asked Portland to cover 100% of the renovation cost. This stands in contrast to Dundon’s own precedent: in 2023, he committed $800 million in private investment alongside $300 million in public funds for his Carolina Hurricanes arena in Raleigh, North Carolina. Seattle’s Climate Pledge Arena, just north of Portland, was renovated for $1.15 billion entirely with private money.
John Van Alst, senior attorney at the National Consumer Law Center, told ProPublica that officials should exercise caution negotiating with someone whose business was previously accused of violating consumer protection laws.
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The Bottom Line
ProPublica’s investigation documents a pattern: a billionaire pushed his company to remove the safeguard confirming borrowers could afford their car loans, profited whether they defaulted or not, left with $700 million, and is now receiving $870 million in taxpayer money for a sports arena. The same state that called his lending practices “predatory and harmful” is writing the checks. Oregon’s AG is currently investigating another auto lender connected to Dundon. Every dollar of public money going to this arena deal is a dollar that isn’t going to the communities harmed by these lending practices.
Frequently Asked Questions
What is proof-of-income verification in auto lending?
Proof of income (POI) is a lending safeguard where the lender requires documentation — such as pay stubs, tax returns, or bank statements — confirming the borrower earns enough to repay the loan. When this requirement is waived, lenders rely solely on the borrower’s stated income, which dealers may inflate to close a sale. The result is loans issued to people who cannot afford them.
What was the Santander Consumer USA settlement?
In 2020, Santander Consumer USA agreed to a $550 million settlement with 33 states and the District of Columbia following an investigation into the company’s auto lending practices. Investigators found the company engaged in lending practices that Oregon’s attorney general described as “predatory and harmful,” including waiving income verification requirements and issuing loans that borrowers could not realistically afford.
What is Exeter Finance and why is it being investigated?
Exeter Finance is a subprime auto lender where several former Santander Consumer executives now hold senior positions. Tom Dundon is listed as an investor and has served as chairman of its board. Oregon Attorney General Dan Rayfield confirmed he is working with other state attorneys general on a continuing investigation into Exeter. The company has said in regulatory filings that it is cooperating with the investigation.
How much public money is going to the Portland Trail Blazers arena?
Oregon lawmakers approved $365 million in state funding, and combined with city and county contributions, the total public commitment has reached $870 million to renovate the Moda Center in Portland. This is significantly more than the team originally requested, and far more public investment than comparable arena deals in other cities.
What can I do if I have a subprime auto loan I cannot afford?
If you’re struggling with an unaffordable car loan, you have more options than most people realize. Depending on your situation, you may be able to refinance, negotiate with your lender, voluntarily surrender the vehicle, or include the debt in a bankruptcy filing that protects other assets. Take the Find Your Path quiz on GetOutOfDebt.org for personalized guidance based on your specific financial situation.
Dealing With Debt? Understanding your options is the first step. See how all your debt relief options compare — including ones most sites won’t tell you about. The Find Your Path quiz gives a recommendation based on your actual numbers, and the Scam-O-Meter checks any company’s complaint history before you sign. Federal Reserve research shows bankruptcy filers recover faster than those who don’t file.
