increase credit Agreed to pay at least $3.3 million to charge people interest rates in excess of the 24% maximum rate permitted by Washington, DC on loans and lines of credit, pursuant to a Explanation by the Office of the Attorney General for the District of Columbia.
The settlement triggers a legal dispute filed by the Office of AG v. Elevate in 2020. Elevate is not a licensed moneylender in the district and said its loans are cheaper than payday loans, which are illegal in DC
More than 2,500 customers are owed refunds and over $300,000 in interest owed to Elevate is forgiven. In addition, the online lending solutions company was ordered to pay the district a $450,000 fine and to end deceptive business practices and keep interest rates below the 24% cap.
“This settlement will put money back in the pockets of District consumers who have been unfairly overcharged. District consumers should be wary of any lender, including so-called FinTech companies, that promise easy money with no financial consequences,” the attorney general said Karl A Racine.
“The truth is often in the fine print. Interest rates like those in this comparison often exceed 100% and wreak havoc on individuals who need an honest and legitimate loan. This resolution is part of my office’s continued focus on protecting DC residents from these predatory lenders,” Racine said.
See Also: Stakeholders Urge Regulators to Ban High-Yield FinTech Loans
Headquartered in Fort Worth, Texas, Elevate was founded in 2014 and provides online lending solutions to non-Prime customers faced with reduced credit options. Located in Washington, DC, the company has offered, provided, serviced and promoted two lending products – Rise with an APR of 99-149% and Elastic with an APR of 129-251%.
The public company, which trades on the NYSE under the ticker ELVT, works with two state-licensed banks to originate both types of loans it offers. However, Elevate controls the loans, assumes the risks and, according to the AG, retains most of the profits.
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