Don Hankey, the chairman of the Hankey Group of Companies in Los Angeles, has built his fortune by lending to borrowers that other financial firms shy away from, such as subprime auto lenders. Hankey’s companies have come under scrutiny from regulators, including the U.S. Justice Department, the Consumer Financial Protection Bureau, and the California Department of Insurance. For example, in 2017, the Justice Department filed a complaint against Westlake Financial, one of Hankey’s companies, for illegally repossessing vehicles owned by military service members. Hankey, who is worth $7.4 billion according to Forbes, is also involved in commercial real estate investment and fleet financing for rental car companies.
Hankey’s company, Knight Specialty Insurance, provided a $175 million appeal bond to Donald Trump, preventing the New York Attorney General from collecting on a $464 million judgment against Trump and his co-defendants in a civil fraud case. This move has brought Hankey into the spotlight, but it has also shed light on some of the consumer complaints against his companies. The Consumer Financial Protection Bureau has received numerous allegations against Westlake Financial, ranging from improperly repossessed vehicles to inaccurate loan balance and payment histories being reported to credit agencies. Customers have also complained about excessive calls from Westlake employees, even after payment arrangements have been made.
In 2015, the CFPB filed a consent decree against Westlake and its affiliate Wilshire, citing illegal debt collection practices that affected 176,000 customers. These practices included changing loan terms without notifying borrowers and misleading customers by posing as employees calling from unrelated businesses to trick them into disclosing their locations. Westlake and Wilshire neither admitted nor denied the findings but paid $44 million to customers and a $4.25 million penalty. KnightBrook Insurance, another Hankey company, was also cited by the California Department of Insurance in 2015 for violations in handling customer claims, such as failing to include fees in total loss settlements and not conducting proper investigations of claims.
Despite these regulatory actions, Hankey’s companies continue to amass billions in assets and employ thousands of people. In 2022, Hankey’s involvement extended to Trump’s loans, with one of his companies helping to refinance some of Trump’s loans when other banks refused. While Hankey’s companies have faced challenges with regulatory compliance and consumer complaints, his willingness to provide an appeal bond for high-profile figures like Trump showcases his ability to navigate complex financial transactions. It remains to be seen how Hankey’s involvement with controversial cases like Trump’s will impact his businesses in the long run.
