By on April 24, 2014

President Obama Signs Finance Reform Bill Into Law

The Dodd-Frank Act, created in the wake of the Great Recession as means to curb the practices by financial corporations that led to the Great Recession in the first place, is now being used to go after an automotive lending company in New York for stealing from its customers.

The New York Times reports New York Superintendent of Financial Services Benjamin Lawsky filed a lawsuit in the U.S. District Court for the Southern District of New York against Long Island-based subprime auto lender Condor Capital Corporation for siphoning millions of dollars from its borrowers by way of shutting out borrowers once a loan had been repaid, preventing them from discovering if any excess funds were still in the account upon full repayment.

Further, Condor’s method of storing personal account information left a lot to be desired, including unencrypted backup tapes sent to the home of the company’s vice president and “stack of hundreds of hard-copy customer loan files lying around the commons areas” of the company’s offices.

Upon the judge’s decision, a temporary restraining order was issued against Condor, freezing all accounts and operations with the potential for Lawsky to recover the millions lost for his state’s customers, or, should he move the lawsuit to federal court, do the same for all of Condor’s customers in the 30 states where the lender does business.

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26 Comments on “Dodd-Frank Act Used In NY State Subprime Lender Lawsuit...”

  • avatar

    I’ve said this before:
    I had a client who needed to buy a car with a 530 credit score. He only qualified for a 21% interest loan from “MAJOR WORLD” and had just started working. Put $1000 down to buy his car. The car was about $27,000 (obviously inflated) and the payments were $680 a month with a $222 insurance premium.

    He absolutely needed a car for work and no one else would give him a loan. I recommended he go to Major World because they are a used car warehouse and they always find something they can get you driving in.

    FAST FORWARD to the present: His credit score has improved to the high 700’s, he’s able to get lower than 3% on loans (I refinanced him) and he drives a new Tesla Model S.

    I said all that to say this:

    The government SHOULD NOT be in banking or in healthcare. The banks will not underwrite risky loans unless they are being insured by the Federal government – because if the system fails, they’ll get bailed out or subsidize the losses. As it is, the banks can make all the risky loans they want.

    We have over a trillion dollars of student loans – mostly from kids who went to school for WORTHLESS liberal arts degrees and currently find themselves without a job. If I was in charge, Banks would make loans only to students going for degrees the country needs which are hard to staff: medical, engineering, etc.

    If banks weren’t subsidized or insured by the tax payer they’d act the same way too.

    You are welcome to get any degree you want: art, animal husbandry, whatever, BUT YOU SHOULD HAVE TO PAY FOR IT.

    N.I.N.J.A loans should be ILLEGAL, but the banks should be responsible for writing a high risk loan to people with poor credit – but able to show good work history and good income. The tax payer should NEVER have to bail these people out. The free market will work if you let it.

    The car market is on fire right now because car loans are easier to get than home loans. 144-month financing is insane (to some), but there are some people who absolutely require a car – nothing fancy – just to get back and forth to work and build their personal finances and wealth over a long period of time.

    By lowering the allowed DTI ratios to 43%, DF has made it harder for young couples fresh to the market to buy a house. Because buying a house is so hard right now for the next generation up – and many houses are still underwater (owning more than the mortgage is worth) there is very little flexibility in the housing market already – with an increasing number of people being forced to rent rather than own.

    Dod-Frank is unconstitutional regulatory overreach. It’s bad for business, bad for the housing market and bad for the auto market.

    • 0 avatar

      In light of your recommendations to your ” client ” methinks your post overall to be more than just a bit blatantly hypocritical .

      So its OK to recommend excessively high interest rate loans on a new car to a client in reality unable to afford it without I have no doubt extreme personal sacrifice ? [ and when a nice used car would of done just fine ] Yet it should be illegal to give loans for higher education unless its in a degree YOU happen to think is of value ? [ seen the stats on unemployed Medical professionals lately ? ]

      Oh wait . I get it . If it pads your wallet its just fine . Anyone else’s though and it should be illegal .

      Hmmm . Come to think of it . Hypocritical is being much too kind . More like Self Serving , Egomaniacal , Extreme Righty Tighty , Quasi Fascist Hypocrite . But then again . You’re obviously a car salesman so this comes as no surprise

      For the record though . I’m no fan of the upcoming Student Loan debacle thats about to bite us all on the @$& in the next ten years or so either . Its your so called ” standards ” as well as your self serving attitude that gets up my nose . Honestly . You’re the type I love getting into it with . Tearing arguments like yours down barely even being a challenge . But most times proving to be quite entertaining

    • 0 avatar

      “The government SHOULD NOT be in banking or in healthcare. ”

      So no FDIC or FDA/DEA? What about the NIH?

      • 0 avatar

        This guy is all about HIS back pocket . Period ! Truth , Facts , Reality , other peoples needs , the Welfare of the Country/State/City he’s in , genuine Patriotism etc playing no part what so ever in the mans thinking/decision making process

        e.g. A Righty Tighty @$&hat personified

        Or to coin the song title ;

        an ” American Idiot ”

        I get the dubious pleasure of dealing with his kind on almost a weekly basis . When you finally realize what they’re all about beneath the pretense of Patriotism and Intelligence you come to find them as I do to be more than a bit entertaining . Though a bit wearing as well sometimes when one considers just how many like him exist in this country at the moment

      • 0 avatar

        Oh hell . I just realized who this idiot is ! [ I had not paid attention to his moniker /website address ]

        Suffice it to say I wouldn’t take this blatant and abject liars word for it on anything unless it benefits him directly . Not to mention ignoring the idiotic and uninformed opinions he puts forth on the net . The only thing worse than his political and financial opinions and the fictional stories he tells being the ” reviews ” [ and I use that term loosely here ] he gives on his site

        Damn ! Now I’m sorry I wasted my perfectly good time responding to this Puddle of Digital Pond Scum

        • 0 avatar

          Who’s the fool?
          The fool or the fool that follows him?

          I’ll think about your comments when I’m cashing my next check. Made possible by viewers like you!

          • 0 avatar

            So for your next trick are you going to cut the hand off of Ponda Baba with a lightsaber?

          • 0 avatar

            ” Made possible by viewers like you!”

            Certainly not by me. Damned if I’ll give you one red cent.

            Typical – label anything you don’t like as socialism when you haven’t a clue what it means. High logic.

          • 0 avatar

            Just to be clear here, the political dialog you’re parroting was designed to shift blame away from those in finance substantially guilty of fraud onto the nebulous “gubmint” scapegoat.

            In reality, said representative gubmint’s main fault is looking the other way on certain (wealthy white-collar) types of crime to serve the worldview of their constituents that money washes away sin.

            Also, I don’t think being ridiculed is helpful to your viewer count.

        • 0 avatar

          Sir Your assessment is correct. Big truck is nothing more than a GOP Tea Bagger who rails against gob‘mint money handouts unless the money lands in his wallet, just like Barbara Bachmann whose husband ran a clinic that took medicate payments.

      • 0 avatar

        Sir you forgot Social Security and Medicare as well.

        • 0 avatar

          YEAH BECAUSE WE ALL KNOW just how well SOCIAL SECURITY, MEDICARE, The DEA and FDIC are doing!!!

          You guys are bringing up examples of SOCIALISM and CRONY CAPITALISM!

          Good job!

          • 0 avatar
            Dave M.

            Trickle-up-poverty has been working pretty well the last 30 years or so.

          • 0 avatar

            @ Dave M

            Most appropriate response good sir . Reagan’s Trickle Down Economics having as predicted [ even by the Moderate Right back then] Trickled right back up into the pockets of the very Rich it was supposed to Trickle Down from

    • 0 avatar

      BWTM – Your assumptions overall [ especially your ludicrous assumptions as to why the housing market is failing ] not to mention the whole TESLA S bit wreaking more than a tad of a complete and utter pant load .

      Might I recommend an investment on your part in a genuine education : rather that following the propaganda and rhetoric of a few deluded and self serving talking head morons unable to distinguish Agenda from Fact before posting on a rather serious and complicated subject such as this .

      Also perhaps a serious study in Ethics & Morality seeing as how you seem to be lacking in both .

    • 0 avatar

      Why is a person with credit problems and no work history even CONSIDERING a 27000 new car loan. I went for years (by choice) on sub used 1000 cars .

      (And if the job dries up he won’t need to make payments)

    • 0 avatar

      “Dod-Frank is unconstitutional regulatory overreach.”

      I just want to zero in on this. Dodd-Frank may be regulatory overreach (matter of opinion with which I happen to disagree, but then I work in finance, so WTH do I know?), but I’m unaware of any argument that the Act as a whole is unconstitutional. It was passed by both Houses of Congress, signed by the President, and regulates the activities of large financial institutions, many of which are nationally chartered and traded on national (or international) exchanges, the overwhelming majority of which solicit customers and transact business across state lines, and all of which use the means and instrumentalities of interstate commerce (the Internet, phones, etc.) to conduct their business. Sure, you can nibble around the edges – there are claims, for example, that some of the delegation to the CFPB violates the separation of powers, though those claims were mostly thrown out of court last August – but the Act as a whole is pretty much accepted as a valid exercise of Congress’s power.

      People – and by “people” I mostly mean “conservatives” – have this idea that “unconstitutional” is the same thing as “bad,” but it’s not. You could have good laws that are unconstitutional: a law banning Justin Bieber’s music from our national discourse would immeasurably improve our fair Republic, but unfortunately would run afoul of the First Amendment; ditto a law banning those morons from Fred Phelps’ church from picketing soldiers’ funerals. You could have bad laws that are constitutional: an income tax of 95% would be within Congress’s power, but would be a horrendously stupid idea from every perspective.

      What you’re trying to say is that Dodd-Frank is bad policy. That’s fine, say it. But it cheapens the Constitution to use it as some sort of meaningless totem.

    • 0 avatar

      Cliven Bundy wants his talking points back.

  • avatar

    As usual, they go after the guppies while the whales feed.

    • 0 avatar

      Precisely !

      Condor .. a minor player in the automotive subprime market is taken to task while the giants .. especially Ally [ formerly known as GMAC Financial with still deep ties despite the rhetoric to GM ] keep handing out those subprime and excessively long auto loans left and right to folks not qualified to get a loan to purchase a $3.50 Latte at Starbucks … never mind a new car .

      Seriously ! After all the financial repercussions of the Housing Sub Prime loans debacle [ on a purchase that in most cases at least stands a chance of appreciating ]

      What part of subprime loans for cars that depreciate from the moment you drive them off the lot makes any sense what so ever ?

      Oh yeah . Ally’s tie ins to GM . GM’s desperate need to get cars nobody wants off the lot * .Other financial institutions desperate to cash in on the trend . Never mind . I get it . We’re all screwed . This one about to bite us all on the @$& as bad if not worse than the housing subprime loan mess . Guaranteed

      * GM dealers in general and Cadillac dealers specifically are using subprime loans to draw in customers that the likes of Mercedes and BMW wouldn’t even consider [ for lease or purchase ] Yet funny thing . Despite handing out loans for new luxury cars to folks that can’t afford a used ten year old Cobalt : Cadillac is still barely able to give their cars way

    • 0 avatar

      Prosecutors go after what they think they can get. And Condor’s behavior (per the article) is certainly more odious than Ally’s.

  • avatar
    an innocent man

    I found and started hanging out on this site maybe a month or so ago. I am far from a gear head but enjoy talking about and reading about cars. I especially enjoyed the usually very well informed, though sometimes very opinionated comments from the B&B. On cars. Even when I didn’t quite agree, I was always made to think. But there’s been so much politics in the comments lately that I can’t take it any longer. I get enough of that elsewhere, i don’t need it from here. Just when I was thinking it’s time to move from the lurking stage to the trying-to-contribute stage, I now think it’s simply time to move on. Maybe I’ll check back in a few weeks and see if ya’ll are discussing cars again. Till then, I guess its back to my two free articles a day on AN.

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