Legal Framework
Since our inception, SoLo Funds has consulted the top legal experts in the area of consumer finance law to obtain advice on how a new community finance model could work to meet the current needs of Americans.
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For SoLo, these needs included a voluntary, transparent, and empowering finance structure where the majority of the profits from the borrowing activity are to be delivered to other human community members. All aspects of SoLo’s model were designed to meet member needs while meeting known regulatory frameworks.
Through our legal process, we have routinely engaged state and federal regulators regarding our approach because the U.S. does not have a well-defined pathway for our innovative financial services model.
SoLo has never been against a framework
It welcomes one. To that end, SoLo has brought in a General Counsel and recently hired a Deputy General Counsel / Head of Regulatory Affairs to help drive this model forward.
Voluntary Fee Structure
We designed our fee structure to be controlled and powered by the borrower through optionality instead of imposed upon the borrower by the lender.
The terms donations and tips clearly articulate this optionality to our users. Providing an optional tip to a human for providing a service is almost a daily occurrence. Donations are clearly optional extensions of support.
To provide further transparency, we separated the two to clarify who receives the tip (Lender) and who receives the donation (SoLo).
SoLo Score
To help our members feel safe interacting with each other, we created a member score based on cash flow. Members do not pay fees for this score, and SoLo has never sold this score or provided the underlying data to any external third party.
All members, including our lending members, agree to be scored when they connect their external bank account, which measures their bank account age, number of historical transactions, and user behavior with the SoLo platform.
The score improves as members responsibly transact and will decrease with late or missed repayments. Further, this score is never based on archaic creditworthiness factors like FICO scores.
Lender
SoLo never lends money from its balance sheet. The Lenders on SoLo’s platform are all humans who agree to assist borrowers in the marketplace financially.
Repayments
SoLo is a marketplace where users authorize peer-to-peer payments. It will remind users of missed payments up until the point of default but makes no attempts to collect the defaulted loan. At the point of default, loans are sent to a licensed third-party debt collection partner.