Weekly Online Lending Snapshot – September 30, 2016
You’ll find many positive announcements in the Industry News section of this week’s online lending snapshot. So, in the interest of balance, we decided to start by addressing the announcement of enforcement actions against LendUp by the Consumer Financial Protection Bureau (CFPB) and California’s Department of Business Oversight. They mark some of the most significant enforcement actions recently taken against an online lender. And while LendUp’s combined $6.31M fine pales in comparison to the record fine levied by the CFPB against Wells Fargo this month, both should serve as a cautionary lesson to FinTech startups and the financial services space in general. To quote LendUp’s statement released Tuesday on the company’s website, “These regulatory actions address legacy issues that mostly date back to our early days as a company, when we were a seed-stage startup with limited resources and as few as five employees. In those days we didn’t have a fully built out compliance department. We should have.”
As this space continues to transform, we expect this snapshot to change accordingly.
Note that we’ve decided to run this report as of Thursday’s market close in order to ensure its release before the weekend. We encourage you to view and download the report below and welcome any feedback or suggestions our readers may have for publications going forward.