On Friday, the CFPB introduced it was suing cellular peer-to-peer lending platform SoLo Funds for a number of points.
SoLo Funds targets minority and different underserved debtors with short-term loans of as much as $575. This can be a difficult inhabitants to serve and a troublesome area of interest to revenue from.
The CFPB alleges that SoLo Funds has misrepresented the price of its loans, tricked debtors into a compulsory donation, threatened debtors who don’t pay, and created a social credit score rating with out safeguards.
I’ve been following SoLo Funds since they started and have chatted with the founders a number of instances. I’ve additionally invested in dozens of loans on their platform. I imagine they’re attempting to do the best factor however are working a brand new mannequin that has by no means handed regulatory muster earlier than.
Whereas a few of these allegations are critical, I’ve sympathy for SoLo Funds. They serve debtors who’ve few low-cost choices, and whereas they’ve had regulatory challenges during (a number of state actions are pending), the CEO mentioned that this newest motion from the CFPB was a shock.
I imagine that SoLo Funds does extra good than hurt, however it might be an uphill battle to show that to the CFPB and different regulators.
Featured
> SoLo Funds ‘Blindsided’ by CFPB Lawsuit
By PYMNTS
SoLo Funds mentioned it was “blindsided” by a CFPB lawsuit alleging that the web lending platform illegally collected charges from debtors.
From Fintech Nexus
> Embedded lending’s many concerns
By Tony Zerucha
StashWorks is the brand new B2B providing from Stash, permitting any employer so as to add financial savings and investing as a profit to staff.
Podcast
Brendan Carroll, Co-Founder & Senior Companion of Victory Park Capital, on the expansion of personal credit score
The Co-Founding father of Victory Park takes us via the historical past of asset backed lending, how the trade has grown, and what…
Webinar
Identification Verification Methods in a World of Deepfakes and AI
Might 22, 2pm EDT
With the fast proliferation of deepfakes and developments in AI, companies face new challenges in verifying identities…
Additionally Making Information
- USA: SEC: Knowledge Breaches at Monetary Establishments Should Be Reported in 30 Days
New federal rules give some monetary establishments (FIs) a tighter deadline for reporting safety breaches. The SEC adopted adjustments final week that require establishments to inform individuals whose information was compromised “as quickly as practicable, however not later than 30 days” after studying of a breach.
- USA: After loss at Supreme Courtroom, payday lenders vow to maintain preventing CFPB
The payday mortgage trade is trying to prolong its years-long authorized struggle with the Shopper Monetary Safety Bureau. It’s planning to ask a federal appeals court docket to revisit a ruling that upheld a proposed restrict on how usually payday lenders can attempt to pull cash from their clients’ accounts.
- USA: For Gen Z and Millennials, Embedded Loans Beat Conventional Credit score
Although solely a small phase of American customers at present use embedded lending, they’re intrigued by it. Embedded lending may symbolize an incredible alternative for banks and credit score unions to win over coming waves of customers, whereas additionally making a sustainable long-term relationship.
- USA: US Fintech Yendo Luggage $165m in Newest Funding Spherical
Yendo, the creator of the primary vehicle-secured bank card, introduced that it has closed a major financing spherical, with $15 million of fairness and $150 of debt financing, totaling $165 million.
- International: Revolut opens job recruitment instrument to firms on LinkedIn
Revolut has built-in its inhouse recruitment platform with LinkedIn, enabling firms to make use of the toolkit to handle their software and hiring processes direct from the enterprise and employment-focused social media platform.
To sponsor our newsletters and attain 180,000 fintech lovers along with your message, contact us right here.
