By Katanga Johnson

WASHINGTON (Reuters] – On Tuesday, the U.S. Consumer Financial Protection Bureau, (CFPB), ordered LendUp Loans stop issuing new loans and to cease collecting on outstanding loans after repeated fair-lending violations.

The CFPB stated that the Oakland-based lender (which offers online customers funding) agreed to the order. It is a lender which provides financing for those who have historically been ignored by banks due to their riskiness.

Rohit Chopra (CFPB Director) stated that “we are closing down the lending operations at this fintech because it has been lying repeatedly and cheating its customers.”

LendUp was a Silicon Valley investment firm that attracted attention. A spokesperson told Reuters that the company expects to end its operations around 2020.

The Tuesday order follows a September 2021 CFPB suit alleging LendUp violated a 2016 similarity charge order.

LendUp mislead customers about repeat borrowing. It also violated the CFPB’s 2016 order. The agency further stated that it failed to timely provide accurate and up-to-date adverse action notices to clients, as required under fair lending laws.

PayPal Inc. invested in LendUp to compete in the digitally competitive market for payments in 2017.

The agency stated that Alphabet Inc (NASDAQ:) Inc, formerly Google Ventures, and other California-based venture capitalists like Kleiner Perkins and Andreessen Horwitz, owned a stake at LendUp.

In response to the financial crisis of 2007-09, the CFPB was formed in order to combat predatory lending. Short-term lenders are often criticized by advocates and progressives for charging borrowers interest rates which can reach hundreds of percent annually.

Chopra was appointed by Democratic President Joe Biden as a representative of the lending industry to address inequities. He stated that his ambitious goals include increasing enforcement efforts at the agency against companies who repeatedly violate consumer finance law, and focusing on technology firms.