CFPB shuts down payday lender LendUp

[pizzadude]

The Consumer Financial Protection Bureau forced payday lending company LendUp to stop making new loans and cease collecting some outstanding loans as part of a resolution to a lawsuit alleging that the company engaged in illegal and deceptive marketing practices, the regulator said Tuesday.

“LendUp was backed by some of the biggest names in venture capital,” said CFPB Director Rohit Chopra in a Tuesday statement. “We are shuttering the lending operations of this fintech for repeatedly lying and illegally cheating its customers."

https://www.marketwatch.com/story/cfpb-shuts-down-payday-lender-it-calls-the-darling-of-venture-capi...

[SoCalGardener]

The article says something that doesn't make sense to me:

"Payday lenders typically offer short-term loans of $500 or less that are intended to be repaid in a single payment before a customer’s next paycheck..."

I thought the whole point of a PAYDAY loan was to float you until your next PAYDAY. What possible good would it do for a cash-strapped customer to have to re-pay a loan BEFORE receiving their next paycheck? *SMH*

Anyway, I think all payday lenders should be shut down. They're preying on the most [financially] vulnerable segment of the population. Trapping customers in never-ending cycles of taking out new loans to pay off previous ones, and charging OUTRAGEOUS interest on those loans, is just despicable. I don't know how they've been allowed to stay in business this long.

[ChargedUp]

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@SoCalGardener wrote:

The article says something that doesn't make sense to me:

"Payday lenders typically offer short-term loans of $500 or less that are intended to be repaid in a single payment before a customer’s next paycheck..."

I thought the whole point of a PAYDAY loan was to float you until your next PAYDAY. What possible good would it do for a cash-strapped customer to have to re-pay a loan BEFORE receiving their next paycheck? *SMH*

Anyway, I think all payday lenders should be shut down. They're preying on the most [financially] vulnerable segment of the population. Trapping customers in never-ending cycles of taking out new loans to pay off previous ones, and charging OUTRAGEOUS interest on those loans, is just despicable. I don't know how they've been allowed to stay in business this long.

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I fully agree... I've seen payday loans with APR's over 1200%!  I get there's a somewhat high risk factor in these payday loan ideas, but taking someone who's desperate in the first place and squeezing them for this kind of return is utterly asinine!

[Caardvark]

I cringe everytime I see one of those Amscot commercials that tout their loans as financially responsible and borrowers being "independent."

[tnhomestead]

Had some uncle's who would have loved to get 1200% on money loaned. Even they would have never done that, don't kill the goose laying the eggs!

[Anonymous]

Payday lending has been commiting preditory practices for decades now. I understand there should be a level of financial literacy but it doesnt make it right.

[7774x]

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@ChargedUp wrote:

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@SoCalGardener wrote:

The article says something that doesn't make sense to me:

"Payday lenders typically offer short-term loans of $500 or less that are intended to be repaid in a single payment before a customer’s next paycheck..."

I thought the whole point of a PAYDAY loan was to float you until your next PAYDAY. What possible good would it do for a cash-strapped customer to have to re-pay a loan BEFORE receiving their next paycheck? *SMH*

Anyway, I think all payday lenders should be shut down. They're preying on the most [financially] vulnerable segment of the population. Trapping customers in never-ending cycles of taking out new loans to pay off previous ones, and charging OUTRAGEOUS interest on those loans, is just despicable. I don't know how they've been allowed to stay in business this long.

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I fully agree... I've seen payday loans with APR's over 1200%!  I get there's a somewhat high risk factor in these payday loan ideas, but taking someone who's desperate in the first place and squeezing them for this kind of return is utterly asinine!

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My state passed a 36% limit on consumer loans in March 2021.. All Payday,Title loan stores in  state  immediately closed ... Payday loans are tickets to being poor