The Consumer Financial Protection said online lender LendUp will stop lending operations and pay a penalty for practices that the agency said misled and deceived consumers.
The California-based online lender will cease issuing loans and collecting on outstanding loans, and will pay a $100,000 penalty for engaging in “illegal and deceptive marketing,” the CFPB said.
The controversial company had been a fintech trailblazer, with CFPB Director Rohit Chopra noting that it had received significant backing from major venture capital firms, including GV (formerly Google Ventures); Kleiner Perkins; Andreessen Horowitz; PayPal and QED Investors.
“LendUp was backed by some of the biggest names in venture capital,” Chopra said in a statement. “We are shuttering the lending operations of this fintech for repeatedly lying and illegally cheating its customers.”
A LendUp spokesperson said the company is "pleased to have fully resolved its litigation with the CFBP," noting that "LendUp did not admit liability in the settlement agreement."
LendUp's parent company, LendUp Global, launched a neobank, Ahead Financials, in December 2020. That business will not be affected by the settlement involving LendUp, which will "wind down its operations in early 2022," the spokesman said.
LendUp, which billed itself as an alternative to payday lending, was accused of misrepresenting the benefits of its product and violating fair lending regulations.
A Kleiner Perkins spokesperson said the firm had no comment. Google Ventures, Andreessen Horowitz, PayPal and QED Investors could not immediately be reached for comment.
Climate TRACE's data show emissions at the facility-level.Image: Climate TRACE