Platform: SoLo Funds
Investigation Status: Dismissed — Federal Case Voluntarily Withdrawn
Alleged APRs: Exceeding 300%, some as high as 1,000%
SoLo Funds, a peer-to-peer lending platform that markets itself as offering “0% interest” loans as an alternative to predatory payday lenders, is back in business after the Consumer Financial Protection Bureau voluntarily discontinued the lawsuit in February 2025. The lawsuit dismissal came after the acting director of the Consumer Financial Protection Bureau during the Trump administration, Russell Vought, publicly announced the end of the lawsuit against SoLo, calling the fintech lender an “innovative solution” the CFPB had tried to destroy.
The CFPB’s Original Allegations
In May 2024, the CFPB filed a lawsuit against SoLo, accusing the Los Angeles-based fintech lender of having deceived customers by not disclosing the interest and fees they paid on the loans, resulting in customers being charged more than 300% interest per year, with some loans reaching interest rates of 1,000%. The lawsuit claimed that SoLo had advertised loans with no fees and 0% interest but used dark patterns that ensured nearly every customer paid a fee in the form of a “tip” or “donation.”
The initial press release issued by the CFPB (which is no longer available on their site) claimed that the interface of SoLo had been designed in such a way that it would be difficult for borrowers to opt out of the payment of these fees. Bloomberg News interviewed several former SoLo Funds employees in October 2024, who claimed that the founders of SoLo had asked them to conceal the “toggle off” option for the donations on the lending site, which SoLo denies.
The CFPB claimed that the “tips” and “donations” were not optional and were linked with the processing of the loans and the promptness of the disbursement of the funds, and therefore constituted finance charges under the Truth in Lending Act (TILA) that needed to have been disclosed as such. The CFPB claimed that the failure to disclose these charges as interest constituted a violation of federal consumer financial protection laws.
SoLo’s Defense
SoLo has consistently rejected the CFPB’s claims. It pushed back in its legal filings and in public comments. SoLo argues that tips and donations are voluntary, borrowers can set the amount they want, including zero, and no federal law defines tips or donations as finance charges. “We also note the CFPB did not raise any issues with tips and donations during the time we launched in 2018.”
SoLo also positions itself as the tech-savvy disruptor of the traditional payday loan business, which is notorious for APRs running in excess of 400%. Its defense is based on its peer-to-peer model, in which individual borrowers are matched with individual lenders, as opposed to being an institutional lender, and claims this is fundamentally different and thus outside the traditional rules of lending.
The Case Dismissal and Political Context
The CFPB withdrew its case in February 2025, just shortly after Russell Vought took over as acting director. Vought, who was part of the development of parts of the conservative blueprint “Project 2025,” defended SoLo in a post on X (formerly Twitter). He referred to SoLo’s work as an “innovative solution” and stated that the CFPB’s lawsuit was an attempt “to destroy” SoLo.
This case is part of a larger trend. Since President Trump’s return to the White House in January 2025, the CFPB seems to be preparing to reduce its level of enforcement and supervision. It is now focusing its scarce resources on pressing consumer threats, especially against servicemen and veterans. Some of the enforcement actions initiated during the Biden period have quietly been dropped.
State-Level Actions Continue
Though the federal case has been dismissed, the company is still under fire from hundreds of consumers and officials in at least five states, accusing the company of business practices that mirror the same deceptive practices the company claims to stand against.
The attorneys general and financial regulators in California, New York, Massachusetts, Connecticut, and Washington have launched investigations or registered consumer complaints against the business practices of SoLo. As of now, no coordinated state-level enforcement action has been filed.
Verification Status: FEDERAL CASE DISMISSED — PLATFORM OPERATIONAL
SoLo Funds is still in operation, providing peer-to-peer loans through its mobile app. As of now, no federal consent order or remediation has been required of the company, as the CFPB case has been dismissed. However, it is important to note that the claims of the company, such as an effective APR of more than 300% and the use of dark patterns to pressure consumers to leave tips, have not been decided or resolved.
Fintvia Assessment: The SoLo Funds case is one of the most visible examples of how changes in federal enforcement priorities can directly impact how fintech platforms, which allegedly engage in unfair conduct, are treated. A dismissal does not mean that the CFPB’s claims were not true on their facts, only that they were not worth pursuing. Whether SoLo’s “tip” model is a legitimate loophole in TILA’s disclosure requirements or an illicit evasion of consumer protection laws remains to be seen in federal courts. For consumers, the lesson is simple: “0% interest” is not really free if you’re paying another way.
