Dodd-Frank Act Used In NY State Subprime Lender Lawsuit
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.
Seattle-based writer, blogger, and photographer for many a publication. Born in Louisville. Raised in Kansas. Where I lay my head is home.
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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.
As usual, they go after the guppies while the whales feed.
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