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ARTICLE · 08 JUNE 2022

Connecticut Stops FinTech From Unlicensed Lending Activities

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The FinTech company was also cited for operating as an unlicensed consumer collection agency, and for engaging in deceptive acts or practices under consumer protection laws.

United StatesTechnology
Moorari K. Shah
Moorari K. Shah
A.J. Dhaliwal
A.J. Dhaliwal
Pouneh Almasi
Pouneh Almasi
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On May 4, the Connecticut Department of Banking issued a temporary cease and desist order directing a peer-to-peer lending platform that connected borrowers with third-party lenders to cease its lending-related activities on grounds that it was operating as an unlicensed small loan company. The FinTech company was also cited for operating as an unlicensed consumer collection agency, and for engaging in deceptive acts or practices under consumer protection laws.

Under Connecticut law, it is unlawful to engage in the "offering, soliciting, brokering, directly or indirectly arranging, placing or finding a small loan for a prospective Connecticut borrower, without the required license" unless otherwise exempt under statute. The order cited several aspects of the company's business model showing the extent of its involvement and control over the loan transactions on its platform, including:

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