Washington — After trying to reverse the 2020 election, Donald Trump exited the White House with a cash problem and a tarnished reputation, endangering his corporate empire. After many traditional lenders declined, a new source provided a financial lifeline.
Records show that Axos Bank and its main shareholder, California millionaire Don Hankey, have provided Trump with almost $500 million in finance over the previous two years. Trump paid off debts and made a profit while fleeing a lease on his Washington hotel, which lost money.
It included his $175 million down payment on an eye-popping civil fraud punishment this week. Hankey and Axos Bank say the arrangements benefit them financially. As Trump again seeks the White House, ethics and legal experts wonder what lenders may require in return if he wins. Even tiny regulatory changes can generate millions of cash.
If the guy gets back in the White House, they’ve got him over a barrel,” said Richard Painter, a former Bush ethics lawyer who ran for Senate in Minnesota as a Democrat. Democrats have increased monitoring of Axos Bank and Hankey, according to financial filings and court records.
Court records show the SEC examined Axos under Barack Obama after a whistleblower sued the bank for anti-money laundering violations. As president, Trump ended the probe and settled the whistleblower case out of court in 2017.
Hankey, who built his money offering high-interest auto loans to bad credit borrowers, has been criticized too. Westlake Services, one of his companies, was fined $48 million by the Consumer Financial Protection Bureau, an Obama-created agency often criticized by Trump administration officials, for using "illegal" debt collection tactics in 2015.
A 2017 Justice Department complaint accusing Westlake of improperly repossessing at least 70 military vehicles was settled for $700,000. Records reveal that the DOJ discovered Westlake had failed to offer military members an interest rate benefit required by law while monitoring its compliance with the deal, resulting to an additional $225,000 settlement in 2022.
Hankey and his company's attorney did not reply to calls for comment. The Trump campaign did not respond to a request. A brief statement from midsized California bank Axos, previously Bank of the Internet, did not address the SEC probe.
Axos Bank stated its credit to Trump posed no risk since its “net principal balance exposure of less than $100 million.” The Trump campaign received $4,800 from Axos CEO Gregory Garrabrants. Both the bank and Hankey have maintained that politics or Trump's support did not influence their lending decision.
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