LendUp is Liquidating Assets, Including Its Neobank (protocol.com) 18
A bet on banking doesn't seem to have saved troubled fintech LendUp. Parent company LendUp Global has reportedly begun liquidating assets, including its neobank subsdiary, through an assignment for the benefit of creditors, a quieter alternative to a public bankruptcy. From a report: Fintech Business Weekly reported LendUp's plans Sunday. In December, the CFPB ordered LendUp, a fintech primarily known for its earned wage access product, to cease lending operations after allegedly misleading and deceiving customers. At the time, a spokesperson told Protocol that a neobank also owned by their parent company, Ahead Money, would continue operations. The company, once considered an exciting investment opportunity by the likes of Andreessen Horowitz and Google Ventures, faced a lengthy regulatory battle from 2016 to the end of 2021. The company first entered into consent orders with regulators in 2016 after allegedly deceiving borrowers about the terms of their loans, paying $3.63 million in fines. Four years later the company entered another consent order via a joint deal between California and CFPB regulators, paying $6.3 million after allegedly violating the Truth in Lending Act and the Consumer Financial Protection Act. In early 2021 the company entered a settlement whereby it paid $1.25 million because of similar allegations of violations.
Can you convince me fintech has real value? (Score:2)
If I were a gambling man, I'd bed against. Heavily.
But if I were a fintech genius, I'd hedge the bet so even if I lost the bed I'd turn a profit.
I'm not saying that money has no value or that it isn't important. Nothing along those lines. I'm just saying that playing bigger virtual money games with faster computers is worthless. Yes, the mathematical numbers are infinite, but the supply of suckers with real assets to be harvested in the Ponzi schemes is always finite.
Re: (Score:2)
*sigh*
s/lost the bed/lost the bet/
Re: (Score:2)
Another *sigh*
s/I'd bed against/I'd bet against/
The same stupid typo twice in one short comment?
Yet another *sigh*
Paris
in the
the spring!
[sic]
Re: (Score:2)
Fintech absolutely had real value for whoever had too much money to spend and needed a money sink with a small chance of getting a return, instead of a 0 chance of getting a return in, say, bonds.
For 'us plebs'? Not so much.
Re: (Score:2)
What does FinTech have to do with this? So this company made subprime loans via the web. Their method of doing business has nothing to do with why they are being shut down. The problem was their deceptive trade practices.
Re: (Score:2)
Nope, you didn't convince me.
But you made me suspect that you are working in fintech.
Re: (Score:2)
I work for a mortgage company, and we use technology. Our customers can go through the entire mortgage application process via app or web. Does that mean I'm in FinTech?
Re: (Score:1)
Yes, that is what it means. But OP would rather you file papers and let governments do all this money stuff, because more government is always better.
Re: (Score:2)
Hmm... Yes, I think so, though hopefully less so than in 2007 when the "big money" was in floating lots of mortgages that were completely disassociated from such considerations as "owner's" income and underlying property values. Or maybe your company just bundles and sells the mortgages to greater suckers?
Re: (Score:2)
Well, considering that my company funds its loans literally out the pockets of the owners, we are pretty careful about making sure we do our homework!
Re: (Score:2)
You want any citations for books about companies that did it differently? (I hope they've changed the rules since then, but I haven't checked.)
Umm... (Score:1)
What does FinTech have to do with this? So this company made subprime loans via the web.
Didn't you just answer your own question?
Re: (Score:2)
Precisely. Basically, any financial services that are offered "on a computer" are FinTech.
The problem with this company was not the technology, and had nothing to do with the technology. It had to do with deceptive practices.
Re: (Score:2)
The company first entered into consent orders with regulators in 2016 after allegedly deceiving borrowers about the terms of their loans, paying $3.63 million in fines.
Four years later the company entered another consent order via a joint deal between California and CFPB regulators, paying $6.3 million after allegedly violating the Truth in Lending Act and the Consumer Financial Protection Act.
In early 2021 the company entered a settlement whereby it paid $1.25 million because of similar allegations of violations.
LOL. One scam after another.
Every other payday lender should go with them (Score:2)
Every single paycheck lender, whether storefront or web or app-based, makes similar deceptive statements to try to get people to sign up for their egregiously high interest rates. It's nothing short of the rich preying on the poor to make themselves richer.
Get Fucked (Score:4, Insightful)
Predatory payday lenders.
I'll actually miss them (Score:1)
Yes, LendUp is largely a payday lender. But they had rates FAR lower than any other payday lenders.
They helped me get by a few times when my finances we much worse.
The market is worse off without them.