Wells Fargo intervenes as NYS seeks to close LI auto lender
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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.
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.
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.