CT Regulators Ruined A Fintech App That Saved My Life From A Stroke
To the Editor:
Connecticut has been my home for most of my adult life. It’s where I got married, and also divorced, which naturally took a financial toll and lowered my credit score. As time went by, my day-to-day expenses were mounting, and I was in desperate need of a loan to help me manage without going further into debt. It wasn’t until I was in this unfortunate financial situation that I realized I couldn’t find a lender in Connecticut that would help me out in my time of need.
I couldn’t ask my family and friends for assistance and resorted to Google where I discovered this company called SoLo Funds, the nation’s largest community finance app that offers a peer-to-peer lending marketplace that is rooted in the idea of “people helping people.” I was finally able to get a loan because of the supportive members on SoLo. It was easy, painless, and there were no hidden fees or charges. It was simple – something I have yet to experience when dealing with financial institutions that usually have many loopholes and high costs to accessing capital.
I relied on SoLo for most of my everyday expenses. Soon after, I suffered a stroke at the restaurant where I was employed and became ill. My face drooped on one side and because of this, I was out of work for nearly three weeks and didn’t have a paycheck or any income coming in. I needed money to pay my rent and medical bills and naturally, I turned to SoLo again. This platform was my lifeline when I was scared and unsure of how I would pay for my medication or health insurance, which are incredibly expensive. I used SoLo’s marketplace to request a loan and time and time again it proved to be reliable. I was using the app about two to three times a month, and, at some points, up to four times a month because of my condition. SoLo helped me through difficult times when I had nowhere else to turn.
And then, out of the blue, as I was getting ready to use the app again, it was paused in my state. I couldn’t believe what happened and it felt like I took ten steps backwards after making some progress. For the most part, Connecticut has done a good job at embracing technology. The state government and regulators however have failed at adopting innovative business models like SoLo, and instead have put actions in place that prevent fintech innovators from operating in the state despite the fact that they are cheaper and more accessible than payday lenders and even credit cards. Connecticut needs to modernize how it operates as these actions aren’t just against these apps either. Just recently Connecticut decided to ban consumers from buying electric vehicles directly from manufacturers. It’s becoming a disturbing trend that is hurting Connecticut residents and needs to stop.
Like me, most residents in the state are living paycheck-to-paycheck, and Connecticut has cut off a viable, safe alternative to accessing funds and avoiding deficiency and debt. Thousands of individuals and households in Connecticut relied on SoLo to bridge the gap when we can’t make ends meet between paychecks. SoLo helped to alleviate this burden. It’s been nearly a year since Connecticut has paused SoLo, and I had to get another job where I’ve been working nonstop as I can’t access SoLo anymore. I am still feeling the negative impacts of this loss.
It’s time the Connecticut Department of Banking embraced community finance and removed these limitations as they lack the understanding of how platforms like SoLo work to empower community borrowers and lenders to help each other in times of need. SoLo is simply providing the marketplace for us residents, not acting as a lender, and therefore the same discriminatory rules that were set in place many years ago do not apply. In my years of using the app, I never was taken advantage of, and I voluntarily gave a “tip” to a person of my choosing if I wanted to. It wasn’t enforced, and it’s exactly the same fees that I would pay at dinner or for my Uber ride. Instead of building a new regulatory framework for companies like SoLo, policy makers in Connecticut are selectively enforcing companies that we need and licensing the ones we don’t. These amendments should happen quickly, and there needs to be legislative fixes that would reopen the door to Connecticut for innovators like SoLo Funds.
Daniel Carter
Norwalk, CT
