Rep. Jonathan L. Jackson Letter to the CFPB Director Rohit Chopra Regarding SoLo Funds
September 5, 2024
The Honorable Rohit Chopra
Director
Consumer Financial Protection Bureau
1700 G St. NW
Washington, D.C. 20552
Dear Director Chopra:
I am writing today on behalf of SoLo Funds, a community-focused lending platform providing important access to funds to under-served communities. SoLo Funds’ peer-to-peer lending platform provides borrowers and lenders the ability to apply advanced technology to support the seamless and quick transacting of short-term, small-dollar lending.
I have had the opportunity to speak with and understand how SoLo Funds can help both my own constituents and those across the country access small dollar loans at little or no cost. Fewer than half of American consumers have enough in savings to pay for a $1,000 emergency, and most of these Americans are in historically marginalized communities. As the only Black-led Certified B Corp, SoLo Funds aims to provide equitable access to capital across these communities. SoLo provides a community-based solution to the failures of the financial market. The SoLo marketplace is available to all consumers regardless of their credit score, credit history (or lack thereof), or socio-economic status. Unlike a legacy financial institution, SoLo does not fund loans, and is not the “Lender” under the terms of any Loan Agreement and Promissory Note. Instead, the loans available on the SoLo marketplace are funded by other consumers, who are the Lenders. None of the loans funded on the SoLo marketplace have been funded in the name of a financial institution.
SoLo’s model is new in the financial marketplace, but they are by no means the only provider of this type of service. What distinguishes SoLo is the fact that they are minority-founded, owned and operated. It is my understanding, that like many of their peers in this market segment, SoLo has engaged with regulators on the state and federal levels to explain the model and the extraordinary steps they take to ensure customers are protected while receiving much needed finance. I understand from my discussion with the company that it has voluntarily engaged with the Bureau over the past two years and provided a full accounting of its model, process of customer engagement and activities in various states.
Under your leadership, the Bureau has been at the forefront of ensuring the type of access to affordable funds Solo provides, balanced of course with critical protections for consumers. While SoLo Funds’ business model is different from other lending platforms that state or federal regulators may have encountered, their ability to provide financial access to undercapitalized Americans is far-reaching and important. I hope you will work with the SoLo Funds team to find fair, meaningful regulation that allows for them to operate in a robust way across the country so that innovation across this field can continue.
Thank you for your time and consideration. I look forward to hearing from you.
Sincerely,
Jonathan L. Jackson
Member of Congress