According to PANews, the U.S. Consumer Financial Protection Bureau (CFPB) and peer-to-peer lending platform SoLo Funds have agreed to terminate the agency's lawsuit against the company, as revealed by court documents. This decision comes amid a complete halt in enforcement actions.
The lawsuit against the Los Angeles-based fintech company has been ongoing since May 2024. SoLo Funds presents itself as a third-party platform connecting borrowers with lenders without mandatory fees or interest. However, the CFPB's complaint indicated that the total cost of some loans serviced by SoLo Funds equated to an annual interest rate exceeding 1,000%.
SoLo Funds is the first of many enforcement proceedings the regulatory agency plans to cease. Earlier this month, the CFPB cancelled contracts with all expert witnesses involved in existing enforcement lawsuits and cleared over $100 million in contracts within the agency.
Initially, the CFPB sought to pause the lawsuit against SoLo Funds while reviewing all its enforcement actions. SoLo Funds opposed this, and U.S. District Court Judge Gary R. Klausner of the Central District of California dismissed the request in a ruling earlier this month.
In the same month, officials from U.S. President Donald Trump's administration began dismantling the CFPB, which was established by Senator Elizabeth Warren following the 2008 financial crisis to protect consumers. The Trump administration dismissed the bureau's director and dozens of other employees and closed its Washington headquarters. However, plans to lay off more than 1,500 CFPB employees have recently been put on hold.
