May 16, 2023
SoLo Announces Connecticut State Resolution bringing the Community Finance Platform back to Residents
All resolutions include no admission of wrongdoing as well as a clear path forward for SoLo to continue to serve in each jurisdiction.
SoLo is one of the more affordable solutions to consumers being ½ the total cost of subprime credit cards over a 12 month period per noted report.
Los Angeles, CA, May 16, 2023 – SoLo, the largest community finance platform in the US and a 2023 CNBC Disruptor 50 company, has reached a resolution with the Connecticut Department of Banking regarding its 2022 temporary Cease & Desist order. The resolution marks a marquee conclusion and provides a clear pathway forward for SoLo to serve Connecticut state residents.
“We are thankful for the due process afforded us by the Connecticut Department of Banking, and appreciate their efforts to work through this matter in the spirit of collaboration with SoLo,” said Kyle George, Head of Regulatory & Government Affairs. “The effort the Department put into this resolution will ultimately benefit struggling Connecticuters, who have limited options for affordable small-dollar loans.”
This announcement comes on the heels of resolution announcements in DC and CA. The resolutions in all three jurisdictions included no admission of wrongdoing, and a clear path forward. Although SoLo disagrees with the accusations, we are happy we were able to work collaboratively and constructively towards positive resolutions.
“Despite the regulatory focus on fintechs, our financial system is dominated by traditional products which are the most significant culprits of predatory behavior,” George said. “The status quo does not work. If policymakers are sincere about protecting borrowers and effecting change, they must embrace new models. They cannot legislate by enforcement, suffocate innovation, and then wonder why nothing changes.”
SoLo Funds recently commissioned Opinium and the London Centre for Economics and Research to conduct an economic study to assess the true costs of borrowing short-term capital. The resulting report titled, “The 2023 Cash Poor Report,” authored by University of Wisconsin–Madison Professor of Consumer Science Melody Harvey, is set to release in a few weeks.
Ahead of the report publication, SoLo Funds has released an excerpt created by London’s Centre for Business and Economics. This study definitively concludes that subprime credit cards are the most expensive solution for short-term cash needs. The excerpt is available here.
“When annual fees, subscription fees, and monthly compounding late fees are included, the cost of borrowing on a subprime credit card becomes astronomical,” said SoLo Co-Founder & CEO, Travis Holoway. “These companies use the system by imposing all these fees, fully knowing that none of them are included in the calculation of APR. Yet, regulators and policymakers remain myopically focused on APR, while wilfully blinding themselves to these traditional players.”
“The findings in the report are sad. With credit cards having 80% use among Cash Poor Americans, it’s sad that regulators find appeasement in addressing fintechs vs. the true culprits. It’s sad that traditional companies use the current system to legally communicate deceptive ‘APR’ numbers, but ultimately continue to cause harm based on what consumers really pay,” said SoLo Co-Founder & President, Rodney Williams. “We are the premiere model for community lending where 100% of tips go to consumers, not an institution. With 82% of our members being in underserved communities, we are happy with our pathway forward.”
SoLo was founded by best friends, Travis Holoway and Rodney Williams, who had first-hand experience with the difficulties their families and loved ones had with accessing short term loans and yield. The solution they designed now provides access to short-term capital and lender returns at an unprecedented scale. On May 9, 2023, CNBC acknowledged the impact of this innovative model by naming SoLo Funds to its 2023 Disruptor 50 list.
SoLo’s vision of community finance is powered by people. As the only Black-owned Certified B Corp fintech in the U.S. and Canada, SoLo has promoted innovation and community impact. With rising popularity amongst consumers, SoLo recently passed the momentous milestone of 1 million users.
Read our announcement on PR Newswire.