In California, My Brother-in-law Has Been Driving My Car With A Suspended License, Could My Car Be Towed If He's Pulled Over?

A few weeks ago my brother-in-law (BIL) asked me if he could borrow my Honda Civic because his car was having mechanical problems and he needed a way to get to work. My wife and I have our own cars and the Civic is an older model that is paid off that we plan to give to our daughter in a few years so we don't have immediate use of the Civic and agreed to let him use hit while his car is in the shop.
Fast forward to last night and the BIL is over for dinner. As the night went on we had a few drinks and the BIL confessed that his car actually works, but his license is suspended and he didn't want to risk his car being towed. After hearing this, I felt betrayed because his dishonesty, but then I worried because what if he gets pulled over, would my car be towed away instead? Are there any repercussions for me since I let him drive it - and now it would be considered knowingly?
My wife is telling me that it's fine and is insistent that I continue to allow BIL to use the Civic, but I am concerned that this is going to come back to bite me. Can someone please give some input? Can they tow my car away and cite me for letting him use the vehicle? This is in California. TIA.
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