WASHINGTON, Dec.21 (Reuters) – The United States Consumer Financial Protection Bureau (CFPB) on Tuesday announced that it had ordered LendUp Loans to pay a $ 100,000 fine, stop issuing new loans and stop collecting some loans past due after repeated deceptive marketing and other fair loans. offenses.
The Oakland, Calif., Based lender, which provides financing to online consumers who have traditionally been overlooked by banks because they are considered too risky, accepted the order, the CFPB said.
“We are closing the lending operations of this fintech for having repeatedly lied and deceived its clients,” said Rohit Chopra, director of the CFPB.
LendUp, which had caught the attention of major Silicon Valley investors, plans to complete the shutdown of its operations in early 2020, a spokesperson told Reuters.
Tuesday’s order comes after a CFPB trial in September 2021 alleging that LendUp continued to violate a 2016 order stemming from similar charges.
LendUp has misled consumers about the benefits of repeat borrowing; violated the 2016 CFPB ordinance; and failed to provide timely and accurate adverse action notices to clients, as required by fair loan laws, the agency added.
In 2017, PayPal Inc. invested here in LendUp as part of its effort to gain an edge over its competitors in the highly competitive digital payments market.
The CFPB was created following the global financial crisis of 2007-2009 to crack down on predatory lenders. Progressives and advocates have long criticized short-term lenders for charging borrowers annualized interest rates that often reach several hundred percent.
Chopra, asked by Democratic President Joe Biden to help address lending inequalities, said his ambitious agenda includes increasing the agency’s focus on law enforcement on companies that violate repeatedly consumer credit laws, with particular emphasis on fintech and other tech companies. (Report by Katanga Johnson in Washington, edited by Dan Grebler)