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Interest Rates in Excess of 4000%?!?
Fintech darling Solo Funds held accountable by Connecticut Banking Commissioner
It seems a darling of the fintech lending industry is being taken to task by the Connecticut Banking Commissioner for lending money at effective APRs in excess of 4000% — yes, you read that right.
Jason Mikula of Fintech Business Weekly tells the tale:
Apparently, the Connecticut Banking Commissioner issued a “cease and desist” order to Solo Funds for multiple violations of Connecticut state law.
It is possible to request a loan on Solo’s platform with no tip and no donation — which, apparently, was part of the company’s response to Connecticut’s investigators.
However, according to the order, every loan Solo facilitated in Connecticut included a tip or donation (emphasis added):
“Respondent has represented to the Department that ‘Borrowers may opt to include a Lender Tip or a SoLo Donation, but neither is required to submit the Loan request nor to receive a Loan.’
Nevertheless, 100% of the loans to Connecticut residents originated on the Platform from June 2018 to August 2021 either contained a Lender Tip or a SoLo Tip. In addition, Respondent recommends that consumers ‘Tip’ to receive a loan.”
