LendUp

LendUp was an American online direct lender. It offered payday loans, installment loans, and credit cards to consumers with low credit scores using publicly available data to assess creditworthiness.[1][2] The company referred to its customers as “the emerging middle class.”[3][4] LendUp also issued credit cards in partnership with Tom Steyer's Beneficial State Bank.[5][6]

LendUp
TypePrivate
IndustryConsumer finance
Founded2012
Founders
  • Sasha Orloff
  • Jake Rosenberg (CTO)
FateDefunct
HeadquartersSan Francisco, California
Area served
Nationwide
Key people
  • Anu Shultes (CEO)
  • Bill Donnelly (CFO)
  • Vijesh Iyer (COO)
  • Nigel Morris (Board Chair)
ProductsPayday loans, installment loans
Number of employees
c. 250 (Q3, 2018)
SubsidiariesAhead Financials
Websitewww.lendup.com

LendUp was co-founded by in 2011 by stepbrothers Sasha Orloff and Jake Rosenberg and incubated at Y Combinator.The company positioned itself as a "socially responsible lender," and claimed to provide access to financial services for "underbanked" Americans in addition to lower cost credit and credit-building opportunities.[7]

LendUp received $325 million in equity and debt financing from PayPal, Kleiner Perkins Caufield & Byers, Google Ventures, Andreessen Horowitz, Alexis Ohanian, Y Combinator and QED Investors, among others.[8] In an article published shortly after the company's launch, Time Magazine wrote that LendUp "says it’s not like other payday lenders. Yet the fees it charges — a little over $30 to borrow $200 for two weeks — are similar to what its competitors charge."[2]

In 2016, LendUp paid $6.3 million in fines for deceptive practices [9] and widespread violations of payday and installment loan laws.[10][11][12] In 2016 it was again sued by the Consumer Financial Protection Bureau for violating the Military Lending Act.[13][12][14][15]

In December 2021, as a result of deceptive marketing and fair lending violations, LendUp was fined $100,000 by The U.S. Consumer Financial Protection Bureau. Additionally, the company was required to stop issuing new loans and stop attempts to collect on certain loans. The action was taken to resolve a September 2021 lawsuit that alleged LendUp practiced illegal and deceptive marketing in violation of the 2016 finding.[16] It ceased loan operations in January 2022.[16]

Ahead Financials

In December 2020, LendUp launched Ahead Financials, a digital platform led by LendUp executives. [17] Ahead targets financially underserved consumers.[18]


References
  1. Kolodny, Lora (2013-11-12). "Google Ventures Backs LendUp to Rethink Payday Loans". Wall Street Journal. ISSN 0099-9660. Retrieved 2021-04-20.
  2. White, Martha C. (2012-11-16). "Can a Payday Lending Start-Up Use Facebook to Create a Modern Community Bank?". Time. ISSN 0040-781X. Retrieved 2021-04-20.
  3. "Exclusive: S.F. fintech raises $100 million for subprime lending". www.bizjournals.com. Retrieved 2018-04-22.
  4. Shubber, Kaddim (September 28, 2016). "LendUp: playing with people's lives". Financial Times. Retrieved April 29, 2021.
  5. "LendUp launches a better credit card for people looking to improve their credit". TechCrunch. Yahoo!. 2017-05-16. Retrieved 2021-12-27.
  6. "LENDUP AND BENEFICIAL STATE BANK ANNOUNCE MAJOR EXPANSION OF CREDIT CARD PARTNERSHIP". self-published by LendUp. 2017-05-16.
  7. "Tech's Hot New Market: The Poor". Wired. ISSN 1059-1028. Retrieved 2021-04-21.
  8. Demos, Peter Rudegeair and Telis (2016-08-23). "Silicon Valley Lender Raises Nearly $50 Million for Subprime Credit-Card Push". Wall Street Journal. ISSN 0099-9660. Retrieved 2021-04-21.
  9. "Google-funded loan startup to pay $6.3m for 'deceptive' practices". the Guardian. 2016-09-28. Retrieved 2021-04-21.
  10. Peterson, Andrea (September 28, 2016). "Regulators Crack Down on Alphabet-backed Payday Lender". The Washington Post.
  11. Wall Street Journal (September 28, 2016). "Lender ordered to pay total $6.3 million over payday-loan and installment-lending violations".
  12. Koren, James Rufus (2016-09-27). "Google-backed LendUp fined by regulators over payday lending practices". Los Angeles Times. Retrieved 2020-07-19.
  13. "LendUp overcharged military borrowers, CFPB says in lawsuit". American Banker. 2020-12-04. Retrieved 2021-04-21.
  14. Mark Calvey (2021-08-18). "LendUp No Longer Offers Installment or Single-Payment Loans". San Francisco Business Times. American City Business Journals. Retrieved 2021-12-27.
  15. "Frequently Asked Questions". LendUp. Self-published. Retrieved 2021-12-27.
  16. Johnson, Katanga (2021-12-22). "U.S. consumer bureau orders fintech firm LendUp to halt new loans, pay penalty". Reuters. Retrieved 2022-01-07.
  17. "Online lender LendUp launches challenger bank". American Banker. 2020-12-01. Retrieved 2022-01-07.
  18. "Ahead's New Campaign Powered by Fairfax Studios Is an Unexpected Combination of Gaming, Music, Tech, Fashion and Finance". HYPEBEAST. 2021-05-20. Retrieved 2022-01-07.
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