Fintech lender previously offered loans with interest rates exceeding 500% APR
Fintech lender SoLo Funds has announced a settlement with the State of California that the company says will allow it to resume doing business in the state. SoLo had previously been flagged by California's Department of Financial Protection and Innovation (DFPI) for offering online loans with interest rates that exceeded 500% APR.
SoLo says the settlement it has reached with California will allow the company to soon resume offering loans to California customers. Presumably, those loans will be within the rate cap required by California statute.
"Today's announcement builds upon the momentum of last week's announcement that we will be resuming business in the District of Columbia," said Kyle George, SoLo's Head of Regulatory & Government Affairs. "It was a pleasure working with the consummate professionals at the California DFPI to identify a clear pathway for SoLo to serve our home state of California."
SoLo recently reached a settlement with the District of Columbia that will allow the company to resume business there.
The case in the District of Columbia was also a result of SoLo's tip-based scheme that attempted to subvert interest rate caps. SoLo will refund money to DC customers who paid rates in excess of that jurisdiction's 24% rate cap.
“Our office will not tolerate Fin-tech lenders resorting to new, deceptive practices that adversely impact vulnerable residents who are frequently ineligible for traditional loans,” said DC's Attorney General Brian Schwalb.
As part of the settlement reached in DC, SoLo will no longer be allowed to require tips or to favor loans where a customer agrees to offer a tip. The terms of the settlement in California are not yet clear.
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