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Offering $175 million appeal bond for Donald Trump when other insurers won't is business as usual for California financier Don Hankey. As head of the Los Angeles-based Hankey Group of Companies, which includes an insurance company, a subprime auto lender, and a commercial real estate investment firm, Hankey amassed a fortune lending to borrowers shunned by other financial firms.
Hankey's help for Trump It brought a little-known billionaire into the spotlight. But in recent years, several of his companies' operations have attracted the attention of the U.S. Department of Justice, the Consumer Financial Protection Bureau, and the California Department of Insurance. Public records show that since 2015, regulators have taken action against Hankey's companies four times.
In 2017, for example, the Department of Justice filed a complaint in federal court in California v Westlake Financial, a large subprime auto lender in Hankey. With a network of 50,000 auto dealers and $3 billion in assets under management, Westlake Financial calls itself the “Yes! Yes Lender!”.
The Justice Department's complaint alleged that Westlake and its subsidiary, Wilshire Commercial Capital, illegally repossessed at least 70 vehicles owned by military service members protected under the Servicemembers Civil Relief Act. The companies paid $761,000 to settle these charges.
Five years later, the Justice Department returned with another case complaint v. Westlake, alleging that it failed to provide service members with the interest rate benefits they were entitled to under the law. The company paid $225,000 to settle this matter.
“Service members make tremendous sacrifices, and we have a responsibility to protect their rights and ensure they have full access to the important benefits guaranteed by law,” Martin Estrada, U.S. Attorney for the Central District of California, said at the time of the settlement. .
Hankey did not immediately respond to a request for comment.
The self-made Hankey is worth $7.4 billion, according to ForbesThe company's website says that its companies control assets worth $18 billion and employ more than 3,000 employees. Its seven financial entities include Westlake, Knight Insurance Group, whose unit filed the appeal bonds to Trump, a commercial real estate investment firm and a provider of fleet financing to car rental companies. He is also a major shareholder in Axos Financial, the San Diego company whose bank he owns Refinancing Some of Trump's loans in 2022 when other banks declined.
An appeal bond filed to Trump by Hankey Knight Specialty Insurance prevents the New York Attorney General from collecting the $464 million judgment she won against Trump and his co-defendants in a civil fraud case while Trump appeals the ruling. The judge supervising the matter decided that the defendants had committed “continuous” fraud over several years.
Some of Hankey's clients are not happy with his company's practices, according to consumer complaints filed against Westlake with the federal Consumer Financial Protection Bureau. Over the past year, records compiled by the agency show a near-daily stream of customer allegations against Westlake, ranging from improperly repossessed vehicles, charges on a loan the customer did not sign up for, and failure to provide accurate loan balance and payment history to credit reporting agencies. Such mistakes can cripple consumers' ability to obtain other loans, rent housing, or even secure jobs.
Complaint records also show that customers who default on their auto loans say Westlake employees contact them frequently. “Even when I have a payment arrangement in place, they will still call up to 6 times a day, 7 days a week,” one Florida borrower wrote last month.
Hankey's companies have also been subject to regulatory action by the CFPB and the California Department of Insurance. According to a 2015 consent decree the CFPB filed against Westlake and its subsidiary Wilshire, the CFPB found that Westlake and Wilshire pressured borrowers using illegal debt collection practices. About 176,000 customers were affected, the consent order said.
According to the CFPB, Westlake and Wilshire changed the terms of the loan without telling borrowers, resulting in additional interest accumulating on the loans. The companies also allegedly misled customers by manipulating caller IDs and posing as employees calling from flower shops or pizzerias to trick borrowers into revealing their locations or vehicles for repossession purposes. In other cases, Westlake collection agents led borrowers to believe their cars would be released if they paid a certain amount, usually less than the full amount owed. Once those payments were made, Westlake did not release the vehicles, the CFPB found.
Westlake and Wilshire neither admitted nor denied the findings, but they paid $44 million to clients and a $4.25 million fine.
KnightBrook Insurance, another Hankey subsidiary, was as well Quote By the California Department of Insurance in 2015 for a host of violations in the way it handled customer claims. Over the course of one year, the department reviewed 127 auto protection and warranties claims handled by KnightBrook, finding 45 violations of state insurance law.
Those alleged violations included failing to include fees in the total loss settlements clients received, failing to “conduct a thorough, fair and objective investigation of the claim and diligently pursue it”; Failure to pay salvage certificate fees; and failure to pay reasonable towing fees.
According to the report, KnightBrook agreed with the state's findings and said it “intends to implement corrective action in jurisdictions where possible.”
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