Elevate Credit has agreed to pay a minimum of $3.3 million to charge interest rates above the 24% maximum allowed by Washington, D.C. for loans and lines of credit, according to a statement from the attorney general’s office. of the District of Columbia.
The settlement resolves a lawsuit filed by the AG’s office against Elevate in 2020. Elevate is not a licensed lender in the district and said its loans were cheaper than payday loans, which are illegal in DC.
More than 2,500 customers must repay and more than $300,000 in interest owed to Elevate will be waived. In addition, the online credit solutions company was ordered to pay a $450,000 fine to the district and is required to end deceptive marketing practices and keep interest rates below the 24% cap.
“This settlement will put money back into the pockets of consumers in the district who have been illegally overcharged. District consumers should be wary of any lender, including so-called FinTech companies, that promises easy money without any financial consequences,” said Attorney General Karl A. Racine.
“The truth is often buried in the fine print. Interest rates like those involved in this settlement often exceed 100% and have a devastating impact on people who need an honest and legal loan. This resolution is part of my office’s continued focus on protecting DC residents from these predatory lenders,” Racine said.
See also: Advocacy groups call on regulators to ban high-interest FinTech loans
Based in Fort Worth, Texas, and founded in 2014, Elevate provides online credit solutions to unprivileged consumers facing diminished credit options. In Washington, DC, the company offered, provided, managed and advertised two lending products – Rise, with an APR range of 99-149%, and Elastic, ranging from 129-251%.
The public company, which trades on the NYSE under the symbol ELVT, is partnering with two state-chartered banks to create the two types of loans it offers. Elevate, however, controls the loans, bears the risk and retains the majority of the profits, according to the statement from the AG.