Wells Fargo intervenes as NYS seeks to close LI auto lender

Condor Capital specialized in lending to low-income borrowers Condor Capital specialized in lending to low-income borrowers without the credit history or financial wherewithal to qualify for a conventional loan. This photo is from May 2012. Photo Credit: Google

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Wells Fargo has intervened in an effort by state regulators to shutter a Long Island subprime auto lender, saying the company owes the bank more than $260 million.

The state Department of Financial Services filed a federal lawsuit last week against Hauppauge-based Condor Capital, accusing it of bilking millions from low-income customers. Afterward, a judge issued a temporary restraining order freezing Condor's assets and bank accounts.

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Those assets and accounts, however, are collateral for $261 million in loans from Wells Fargo to Condor, and the San Francisco bank has filed a motion saying it wants to join the case and have a say in the ultimate disposal of that collateral.

Founded in 1996, Condor specializes in lending to low-income borrowers who can't qualify for conventional loans. Yet, authorities say the company systematically pocketed money from them when they inadvertently overpaid their accounts.

A lawyer for Condor, which has denied it cheated customers, said the restraining order has forced the company to lay off some of its roughly 100 employees without having a chance to fight the accusations.

The attorney, Leah Mary Campbell, said Condor "would love to hire the employees back" and is committed to fixing any deficiencies in the business.

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State Financial Services Superintendent Benjamin Lawsky has asked Judge Colleen McMahon to appoint a receiver to close the company. Condor is opposing that move. McMahon has scheduled a May 12 hearing in Manhattan.

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