CFPB Settles With FinTech Company For Shutdown Deal, Pays $100,000 | PC Weiner Brodsky Kider

The CFPB recently obtained the approval of a fintech agreement to settle his lawsuit with termination of all loans and servicing of loans by that company and payment of a $100,000 fine. The company announced on its website that it was “no longer lending or servicing loans” and that “all outstanding debts have been canceled and no collection attempts will be made.”

Announcing the settlement, CFPB Director Rohit Chopra said, “We are shutting down this fintech’s lending operations for repeatedly lying and illegally defrauding its customers.” These alleged lies include deceiving the company’s borrowers regarding the benefits of repeatedly taking out loans from the company – this fintech company had a unique ladder system in which it told its borrowers that if they paid off their original smaller, higher interest rate loans and took online courses in debt and money management, then they would qualify for larger, lower interest rate loans from of the company. According to the CFPB, most of these customers have never benefited from this advantage.

The court still needs to approve the settlement before it can be considered final. Previous CFPB enforcement actions against this fintech company were covered by WBK here and here.