https://www.consumerfinance.gov/about-us/newsroom/cfpb-shutters-lending-by-vc-backed-fintech-for-violating-agency-order/ Skip to main content An official website of the United States government * Espanol * Zhong Wen * Tieng Viet * hangugeo * Tagalog * Pusskii * l`rby@ * Kreyol Ayisyen (855) 411-2372 Consumer Financial Protection Bureau Submit a Complaint Search Search Close Search [ ] Clear search Search Suggested search terms: * Regulations * Compliance guides * Mortgage * College loans Open the main menu Close the main menu * Submit a Complaint * Consumer Education Back + Consumer Resources Overview + Resources for Practitioners + Coronavirus Resources + Consumer Complaint Database Money Topics + Auto Loans + Bank Accounts & Services + Credit Cards + Credit Reports & Scores + Debt Collection + Fraud & Scams + Money Transfers Money Topics + Mortgages + Payday Loans + Prepaid Cards + Reverse Mortgages + Savings + Student Loans Featured + Explore guides to help you plan for big financial goals Additional Resources + Submit a Complaint + Tell Your Story + Order free brochures + Browse Ask CFPB * Rules & Policy Back Rules & Policy Overview + Final Rules + Interactive Regulations + Rules Under Development + Notices and Opportunities to Comment + Regulatory Agenda + Petitions for Rulemaking + Innovation + Taskforce on Federal Consumer Financial Law + Advisory Committees * Enforcement Back Enforcement Overview + Enforcement Actions + Enforcement by the Numbers + Petitions to Modify or Set Aside + Warning Letters + Payments to Harmed Consumers + Industry Whistleblowers * Compliance Back Compliance Overview + Compliance Resources + Advisory Opinion Program + Supervision and Examinations + Supervisory Highlights + Supervisory Guidance + Registration & Submission Programs + Amicus Program * Data & Research Back Data & Research Overview + Research & Reports + Payments to Harmed Consumers + Enforcement by the Numbers + Consumer Complaint Database + Mortgage Database (HMDA) + Consumer Credit Trends + Mortgage Performance Trends + Financial Well-Being Survey + Credit Card Surveys & Agreements + Prepaid Account Agreements Featured + Help advance financial well-being * News Back + Press Releases + Speeches & Op-eds + Testimony + Statements + Blog + Director's Notebook + Recent Updates An official website of the United States government * Espanol * Zhong Wen * Tieng Viet * hangugeo * Tagalog * Pusskii * l`rby@ * Kreyol Ayisyen (855) 411-2372 Newsroom CFPB Shutters Lending by VC-Backed Fintech for Violating Agency Order Google Ventures, Andreessen Horwitz, Kleiner Perkins, and other prominent venture capital firms invested in LendUp DEC 21, 2021 Share & print * * * * * WASHINGTON, D.C. -- Today, the Consumer Financial Protection Bureau (CFPB) announced that LendUp Loans has agreed to halt making any new loans and collecting on certain outstanding loans, as well as to pay a penalty, to resolve a September 2021 lawsuit alleging that it continued to engage in illegal and deceptive marketing in violation of a 2016 CFPB order. The lawsuit also accuses LendUp of violating fair lending regulations. "LendUp was backed by some of the biggest names in venture capital," said CFPB Director Rohit Chopra. "We are shuttering the lending operations of this fintech for repeatedly lying and illegally cheating its customers." LendUp Loans, headquartered in Oakland, California, offered single-payment and installment loans to consumers online and pitched itself as an alternative to payday lenders. LendUp attracted equity and debt investments from prominent investors, including Google Ventures, Andreessen Horwitz, Kleiner Perkins, PayPal Holdings, and QED Investors. A central component of LendUp's marketing and brand identity was the "LendUp Ladder." LendUp told consumers that by repaying loans on time and taking free courses offered through its website, consumers would move up the "LendUp Ladder" and, in turn, receive lower interest rates on future loans and access to larger loan amounts. As alleged in the complaint, in reality, as tens of thousands of LendUp's customers climbed the "LendUp Ladder," they failed to qualify for larger loan amounts and continued to be offered similar or higher interest rates compared to previous loans. LendUp has been subject to multiple enforcement actions by the CFPB. In addition to ordering LendUp in 2016 to stop misrepresenting the benefits of borrowing from the company, the CFPB sued LendUp in 2020 for allegedly violating the Military Lending Act and obtained a judgment against LendUp in that action. In September 2021, the CFPB filed this third action alleging that LendUp: * Deceived consumers about the benefits of repeat borrowing: LendUp misrepresented the benefits of repeatedly borrowing from the company by advertising that borrowers who climbed the LendUp Ladder would gain access to larger loans at lower rates when, in fact, that was not true for tens of thousands of consumers. * Violated the CFPB's 2016 order: The CFPB's 2016 order prohibits LendUp from misrepresenting the benefits of borrowing from the company. LendUp's continued misrepresentations about the LendUp Ladder violate this order. * Failed to provide timely and accurate adverse-action notices required by fair lending laws: Adverse-action notices inform consumers why they were denied credit. Timely and accurate notices are vital to maintain a transparent underwriting process and protect consumers against credit discrimination. LendUp failed to provide adverse-action notices within the 30 days required by the Equal Credit Opportunity Act (ECOA) for over 7,400 loan applicants. LendUp also issued over 71,800 adverse-action notices that failed to accurately describe the main reasons why LendUp denied the applications as required by ECOA and Regulation B. To resolve these allegations, the CFPB filed a proposed stipulated final judgment and order that, if entered by the court, would prohibit LendUp from (1) making new loans; (2) collecting on outstanding loans to harmed consumers; (3) selling consumer information; and (4) making misrepresentations when providing loans or collecting debt or helping others that are doing so. The order would also impose a $100,000 civil money penalty based on LendUp's demonstrated inability to pay. The CFPB will work to provide redress to eligible harmed consumers from the Bureau's Civil Penalty Fund. Read today's proposed stipulated final judgment and order . Read the September 2021 complaint filed against LendUp Loans. Read the announcement of the 2016 enforcement action and consent order that the CFPB alleges LendUp has since violated. ### The Consumer Financial Protection Bureau is a 21st century agency that implements and enforces Federal consumer financial law and ensures that markets for consumer financial products are fair, transparent, and competitive. For more information, visit consumerfinance.gov. Topics: * * Equal Credit Opportunity Act * * Civil Penalty Fund * * Enforcement * * Deceptive practices Press information If you want to republish the article or have questions about the content, please contact the press office. Go to press resources page Stay informed Subscribe to our email newsletter. We will update you on new newsroom updates. Email address [ ] Sign up See Privacy Act statement Subscribe to our RSS feed to get the latest content in your reader. 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