NEW YORK (Legal Newsline) - New York Attorney General Eric Schneiderman announced a settlement Monday with an out-of-state company that allegedly offered short-term auto title loans at usurious rates of interest.
Manor Resources LLC, a Delaware corporation with a principal place of business in Chicago, operates a website through which it runs a nationwide loan business. Manor allegedly charges an interest rate of 10 percent per month or 120 percent annual percentage rate. In New York state, it is unlawful to charge loans in the principal amount of $25,000 or less and charge higher than 25 percent interest without first obtaining a license.
"Lenders that bypass our state's usury laws to prey upon struggling New Yorkers will continue to be held accountable and penalized for their actions," Schneiderman said. "New York is not open for business to predatory online lenders, and Manor is just the latest company to learn that lesson. My office will continue to monitor the web for businesses like Manor so that we can put an end to these illegal practices and protect New Yorkers in financial distress."
Under the terms of the agreement, Manor must ensure all loan accounts on which a balance is currently owed to be closed with a zero balance, notify any consumer reporting agency to which it gave consumer information to delete all references to the transactions from consumers' credit records and cease doing any loan business in New York that violates state law. Manor will pay Schneiderman's office $23,120 to use as consumer restitution, in addition to $10,150 in penalties and costs.
Manor also agreed to remove mandatory arbitration clauses that would require all disputes between the parties to be resolved through arbitration in Illinois rather than through the courts.