Today, the Consumer Financial Protection Bureau (Bureau) filed a lawsuit against LendUp Loans, LLC (LendUp). The Bureau alleges that LendUp violated the Military Lending Act (MLA) in connection with its extensions of credit. LendUp, which has its principal place of business in Oakland, California, is an online lender that offers single-payment and installment loans to consumers. The Bureau’s complaint, filed in the United States District Court for the Northern District of California, seeks an injunction, as well as damages, redress to consumers, disgorgement of ill-gotten gains, and the imposition of civil money penalties.
Today’s action is part of a broader Bureau sweep of investigations of multiple lenders that may be violating the MLA. The MLA puts in place protections in connection with extensions of consumer credit for active-duty servicemembers and their dependents, who are defined as “covered borrowers.” These protections include a maximum allowable annual percentage rate of 36%, known as a Military Annual Percentage Rate (MAPR), a prohibition against required arbitration, and certain mandatory loan disclosures. The Bureau alleges that since October 2016, LendUp has made over 4,000 single-payment or installment loans to over 1,200 covered borrowers in violation of the MLA. The Bureau specifically alleges that LendUp’s violations of the MLA include extending loans with an MAPR that exceeds the MLA’s 36% cap, extending loans that require borrowers to submit to arbitration, and failing to make certain required loan disclosures, including a statement of the applicable MAPR.
The complaint is not a finding or ruling that the defendant has violated the law.
A copy of the complaint filed in federal district court in the Northern District of California is available at: https://files.consumerfinance.gov/f/documents/cfpb_lendup-loans-llc_complaint_2020-12.pdf
