The US Consumer Financial Protection Bureau agrees to withdraw lawsuit against lending platform SoLo Funds

According to Bloomberg, court documents show that the US Consumer Financial Protection Bureau (CFPB) and peer-to-peer lending platform SoLo Funds have agreed to terminate the agency's lawsuit against the company in the event of a complete halt to enforcement actions. The CFPB's lawsuit against this Los Angeles based fintech company has been ongoing since May 2024. Although SoLo Funds claims to be a third-party platform that connects borrowers and lenders without mandatory fees or interest, according to CFPB complaints, the total cost of some loans served by SoLo Funds is equivalent to an annual interest rate of over 1000%. SoLo Funds is the first of many enforcement procedures that the regulatory agency plans to halt. Just this month, the CFPB cancelled contracts with all expert witnesses in existing law enforcement lawsuits and cleared contracts worth over $100 million within the agency. The CFPB initially requested a suspension of the lawsuit against SoLo Funds while reviewing all of its enforcement actions. But SoLo Funds raised objections, and Judge Gary R. Klausner of the United States District Court for the Central District of California, who is responsible for hearing the case, rejected the request in a ruling in early February. That month, Trump administration officials began to dissolve the Consumer Financial Protection Bureau, which was established by Senator Elizabeth Warren after the 2008 financial crisis to protect consumers. The Trump administration fired the bureau director and dozens of other employees, and closed its Washington headquarters. However, plans to lay off over 1500 employees of the Consumer Financial Protection Bureau have recently been put on hold.