FinTech: CFPB Shuts Down Payday Lender LendUp For Unfair Practices
LendUp agreed to settle and paid a penalty of $100,000.
The U.S. Consumer Financial Protection Bureau (CFPB) took fintech and payday lender LendUp to task for repeated deceptive marketing and other fair-lending violations. It imposed a $100,000 penalty, and directed the lender to stop issuing new loans and halt collecting on some outstanding ones. (Reuters)
According to the CFPB, LendUp agreed to the order.
LendUp positioned itself as a better alternative to other payday lenders by offering to reduce the interest chargeable on new loans once they repaid the old ones. However, in 2016, the CFPB penalized the fintech for not honoring that promise.
The current order came after a September 2021 CFPB lawsuit alleging that LendUp continued to violate that 2016 order.
“We are shuttering the lending operations of this fintech for repeatedly lying and illegally cheating its customers,” CFPB Director Rohit Chopra said in a press release.
According to American Banker, LendUp said in an email that it is “pleased to have fully resolved its litigation with the CFPB” and noted it did not admit to liability in its agreement with the agency.
“As has previously been reported in the news, LendUp ceased originating loans in the summer. It expects to complete the wind-down of its operations in early 2022,” LendUp said in the statement.
Lendup’s webpage shows the following message currently:
“LendUp is no longer lending or servicing loans. If you previously had a loan with LendUp we thank you for your business. If you still owe money on a loan, we are happy to tell you all outstanding debts have been forgiven and no future collection attempts will be made by LendUp or any LendUp affiliates.”
Google Ventures, Andreessen Horwitz, Kleiner Perkins, PayPal Holdings, and QED Investors are some of LendUp’s investors.
Related Story: Digital Lending Platform LendUp Notches Up $2B in Loans
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