New York Attorney General Eric T. Schneiderman on Tuesday announced a settlement with Manor Resources LLC, a Delaware company that offered short-term auto title loans, secured by borrowers’ vehicles, at usurious rates of interest.

The company, which operates a Web site where it conducts its loan business, agreed to stop doing business in New York.

The interest rate stated on its Web site  is 10 percent per month, or 120 percent Annual Percentage Rate (APR). Manor takes a security interest in the borrowers’ automobiles which, in the event of default, may lead to repossession of the motor vehicles.

New York banking laws make it unlawful to engage in the business of making loans in the principal amount of $25,000 or less to an individual for personal, family, household or investment purposes and charge greater than 25 percent interest without first obtaining a license from the state.

Without such a license, the maximum interest rate a lender is permitted to charge by law is 16 percent APR. State law makes it a crime to charge interest at a rate exceeding 25 percent APR.

“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.”


Manor’s loan contracts required that all disputes between the parties had to be resolved through arbitration rather than through the courts. The settlement provides that loan agreements hereafter used in New York shall not have any mandatory arbitration clauses.

The agreement also provides for all loan accounts on which a balance is currently owed, whether such accounts are current, delinquent, in default, or charged off, to be closed with a zero balance. The agreement further requires the company to notify any consumer reporting agency to which it gave consumer information to delete all references to the transactions from customers’ credit records.

The company will pay the Attorney General’s office $23,120, representing all interest and fees (but not principal) that it collected from New York residents, and the money will be distributed to eligible consumers. In addition, the company has agreed to pay the Attorney General's office $10,150 in costs and penalties.

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