Mortgage

CFPB Shuts Down LendUp’s New Loan Business

CFPB to Better Regulate Banking Overdraft Fees
Written by Publishing Team

The Consumer Finance Protection Bureau (CFPB) said LendUp Loans will have to pay a $100,000 fine, stop issuing loans and stop collecting some outstanding loans after the company received many deceptive marketing complaints, Reuters reported.

CFPB Director Rohit Chopra said the agency is shutting down the company’s lending operations due to “repeated lying and unlawful deception of its clients,” according to the report.

The report stated that LendUp Loans provides financing to online clients who are often overlooked because they are considered too risky.

According to the allegations, LendUp deceived its customers about the benefits of repeat borrowing and violated a similar order in 2016, according to the report. Nor did it provide timely and accurate notice of adverse action, which is required by law.

The CFPB said LendUp agreed to the order, according to the report.

The report stated that PayPal was among the investors in LendUp in 2017, as part of the payment giant’s efforts to outsmart competitors in the digital payments market.

The order followed a lawsuit from the CFPB from September, alleging that LendUp continued to violate an order from 2016.

Read more: CFPB Sues LendUp and Claims Online Lender Rescinded Approval Order

At the time of the 2016 injunction, CFPB hit LendUp with a fine of $1.83 million in consumer compensation and a $1.8 million civil penalty.

“For tens of thousands of borrowers, the LendUp ladder was a lie,” Dave Eugeo, acting CFPB director at the time, said, referring to advertisements posted by LendUp saying that frequent borrowing can help consumers “climb the LendUp ladder.”

“Not only has LendUp structured its business around wholesale deception and keeping borrowers in debt cycles, the company doubled after it got caught the first time. We will not tolerate this illegal scheme and will not allow this company to continue to assault vulnerable consumers.”

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