by Tony Schick and Conrad Wilson, Oregon Public Broadcasting

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.

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.

© ProPublica