Source:https:\/\/techcrunch.com\/2023\/05\/10\/solo-funds-lawsuit-predatory-lending-accusations\/<\/a><\/br>
\nSoLo Funds settles lawsuit over predatory lending accusations in District of Columbia<\/br>
\n2023-05-10 21:48:18<\/br><\/p>\n

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The District of Columbia Attorney General today announced<\/a> an agreement with SoLo Funds, a fintech company that enables peer-to-peer lending, to settle a lawsuit that alleged SoLo Funds engaged in predatory lending practices.<\/p>\n

The practices alleged include Los Angeles-based SoLo Funds not telling customers \u201cthe true cost of the loans on its platform\u201d and that it \u201cfacilitated loans with over 500% APR on average \u2014 far exceeding the District\u2019s 24% usury cap<\/a>,\u201d according to the Office of the Attorney General\u2019s written release.<\/p>\n

In addition, the OAG claims company was \u201cadvertising affordable and flexible loans with no interest and no fees,\u201d but then was requiring borrowers \u201cto pay a percentage of the loan as a \u2018tip\u2019 to the lenders,\u201d and \u201csoliciting borrowers to pay a percentage of the loan to the company as a \u2018donation.\u2019\u201d The OAG\u2019s office is also alleging that \u201cSoLo attracted lenders to its platform by advertising that they could \u2018make a quick return on [their] extra cash,\u2019 but \u201cin reality, for a high percentage of the loans offered by SoLo, the borrowers either failed to repay the loans on time or at all \u2014 which SoLo also failed to disclose.\u201d<\/p>\n

\u201cOur office will not tolerate fintech lenders resorting to new, deceptive practices that adversely impact vulnerable residents who are frequently ineligible for traditional loans,\u201d said Attorney General Brian Schwalb in a written statement. \u201cSoLo sought to disguise exorbitant interest charges by deceptively calling them \u2018tips\u2019 and \u2018donations.\u2019 This settlement makes clear that we will take decisive legal action against predatory lending models in the District and nationwide, regardless of whether the predatory lender is a brick-and-mortar store, or operates entirely online.\u201d<\/p>\n

SoLo Funds has agreed to make certain changes to its practices relating to tips and donations and provide \u201chonest disclosures\u201d to both borrowers and lenders. The settlement also includes paying $30,000 to reimburse District of Columbia borrowers for the tips and donations paid to get their loans and a payment to the District.<\/p>\n

The Office of the Attorney General also said it is \u201cthe first state-level enforcement agency to reach a settlement with SoLo regarding its use of tips and donations to evade usury restrictions.\u201d<\/p>\n

In May 2022, the state of Connecticut gave SoLo Funds<\/a> a temporary cease-and-desist order alleging similar violation of its state rules regarding tips and donations as well as \u201cfor failure to disclose the tips and for not having lending and collections licenses in the state.\u201d<\/p>\n

Meanwhile, the District of Columbia settlement follows an agreement with the California Department of Financial Protection & Innovation<\/a> announced this week that SoLo Funds will be able to resume operations in the State of California.<\/p>\n

\u201cSoLo has created a community finance model that is groundbreaking and innovative \u2013 as demonstrated by our recent inclusion on the 2023 CNBC Disruptor 50 list,\u201d said Rodney Williams, co-founder and president of SoLo via email. \u201cAs a result, we cannot easily be categorized into traditional frameworks. Our recent settlements in DC and CA are the culmination of discussions with each jurisdiction\u2019s department, and we appreciate their receptiveness to innovative ideas around a more inclusive financial system. SoLo is now focused on the future, and we are excited to resume operations in the District of Columbia and the state of California.\u201d<\/p>\n

In February, TechCrunch reported that SoLo Funds had acquired over 1 million registered users and over 1.3 million downloads<\/a> making it \u201cthe largest and first Black-owned personal finance platform\u201d to do so, Williams said at the time.<\/p>\n

Since 2020, SoLo Funds has processed over 800,000 loans, according to the company. It also raised over $13 million in venture-backed capital from firms, including Serena Ventures and ACME Capital.<\/p>\n<\/p><\/div>\n

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\nSource:https:\/\/techcrunch.com\/2023\/05\/10\/solo-funds-lawsuit-predatory-lending-accusations\/<\/a><\/br><\/br><\/p>\n","protected":false},"excerpt":{"rendered":"

Source:https:\/\/techcrunch.com\/2023\/05\/10\/solo-funds-lawsuit-predatory-lending-accusations\/ SoLo Funds settles lawsuit over predatory lending accusations in District of Columbia 2023-05-10 21:48:18 The District of Columbia Attorney General today announced an agreement with SoLo Funds, a fintech company that enables peer-to-peer lending, to settle a lawsuit that alleged SoLo Funds engaged in predatory lending practices. The practices alleged include Los Angeles-based SoLo […]<\/p>\n","protected":false},"author":1,"featured_media":31565,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","om_disable_all_campaigns":false,"pagelayer_contact_templates":[],"_pagelayer_content":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[26,17,8],"tags":[],"class_list":["post-31564","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-science","category-tech","category-technology"],"yoast_head":"\n