CFPB sues LendUp alleging non-payment order from lender
Consumer Financial Protection Bureau (CFPB) alleges in court that LendUp Loans violated a 2016 consent order and cheated borrowers, according to a Press release.
In 2016, CFPB cracked down on LendUp’s habit of misleading users about the cost of loans and the benefits of borrowing repeatedly, the statement said. At the time of the original order, the CFPB fined LendUp $ 1.83 million in consumer redress and a civil penalty of $ 1.8 million.
Now, the CFPB has alleged in the statement that LendUp has continued to do many of the same things for which it was originally reprimanded.
Additionally, CFPB said LendUp failed to provide accurate and timely notice to users who were denied in their loan applications, the statement said.
“LendUp lures consumers with false promises that repeated borrowing will allow them to ‘climb the LendUp ladder’ and unlock lower interest rates,” CFPB Acting Director Dave Uejio said in the press release. “For tens of thousands of borrowers, the LendUp Ladder was a lie. Not only has LendUp structured its business around wholesale deception and keeping borrowers in debt cycles, but the company has doubled down after getting caught for the first time. We will not tolerate this illegal scheme or allow this company to continue to prey on vulnerable consumers. “
In other CFPB news, the agency this month proposed new rules that could help small and medium-sized enterprises (SMEs) access credit.
Read more: CFPB proposal to help SMEs access credit
The proposal would require lenders to disclose information about their SME loans, including “the amount and type of small business credit requested and extended, demographic information on applicants for small business credit and key elements of the price of the loan. credit offered ”. In addition, CFPB also rolled out a new web portal for small business owners.
“Small businesses are the main job creators and creators of wealth in communities across the country,” Uejio said at the time. “After homeownership, owning a small business is the primary way families and communities create wealth. Yet too often small business development is starved for lack of access to responsible credit at a fair price.