LendUp, headquartered in Oakland, California, promised consumers lower interest rates on future loans and access to larger loan amounts through its "LendUp Ladder" scheme. This involved repaying loans promptly and participating in free online courses. Despite these promises, many customers did not receive the promised benefits.
Over the years, the CFPB has taken action against LendUp for misleading marketing and violating fair lending laws, including a 2016 directive to correct its marketing statements and a 2020 lawsuit for breaching the Military Lending Act. Most recently, in September 2021, the CFPB sued LendUp for not honoring its previous commitments and misinforming consumers about the advantages of repeat borrowing, leading to a settlement where LendUp agreed to cease issuing new loans and to pay penalties.
The compensation totaling $39,833,748.87 is sourced from the CFPB's victims relief fund. Affected consumers will receive their payments via Epiq Systems on May 8, 2024.
Visa unveils POS lending API
Visa has launched an application programming interface (API)-based service dubbed ‘Embedded Lending’ that allows merchants to offer installment loans at the point of sale (POS).
It's a part of its wider strategy to drive digital inclusion, help borrower, and businesses, and spark economic growth.
The platform is introduced to circumvent the need for a separate loan origination activity, thereby simplifying the lending process.
Ryan McEndarfer, CEO at Bank Payments, asserts the halo effect caused by the service will boost customer loyalty and repeat sales.
However, merchants need to consider if they should carry the cost of capital or outsource it to a financial partner.
Headlines You Don’t Want to Miss
ClassAction.org is calling consumers who took loans from OppFi
ClassAction.org is calling consumers who took loans from OppFi amid accusations that the company is using a rent-a-bank scheme to charge illegally high interest rates, with APRs reaching up to 160 percent. This alleged scheme enables OppFi to evade state laws that cap interest rates, prompting proposed class action lawsuits that challenge their legality.
DeFi lending protocol Nexo allocates $12M for ecosystem incentives
Nexo is allocating $12 million for ecosystem incentives, including cashback through its Exchange loyalty program and tier bonuses on its Earn in NEXO product, as part of efforts to promote the use of NEXO tokens. The company currently manages more than $15 billion in assets for over a million users worldwide.
‘Black box' auto finance decisions can complicate dealer lender choice
Machine-learning decisions on auto loan applications make it harder to explain to a dealership, 'This is what we buy,' says FinBe USA CEO Scot Seagrave.
Partial win for Title Insurer vs BB&T
A Virginia judge granted a partial summary judgment to Chicago Title Insurance Co. in a lawsuit by BB&T, which alleged the insurer should cover losses from a fraudulent mortgage. While some of BB&T's claims were found not covered by the contract, those related to a lien from a court judgment were permitted to proceed.
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