[anonnel]

To translate what was just said: payday lenders do, in fact, delude themsleves into thinking they are making an impact. It’s always the same material about “helping people in their time of need”.

But the point isn’t about the immediate impact on people’s lives at the moment of funding ... rather the longer impact during the time that they will hold the debt, and the high interest cost to those who can afford it least. Multiply that into man-years per your Steve Jobs anecdote! ‍️(smh)

There’s a reason usury is illegal, and why payday lenders have to pair with sovereign nations and shady legal structures, and why google won’t even list you, etc.

shame.

But oh no. I’ve just bad-mouthed a YC company on HN! Here comes dang!!

[austenallred]

Lending to subprime borrowers is hard, because there's high default. Most payday lenders solve for that by having those that don't pay enter into a cycle of more and more loans that compounds.

You know what LendUp does if a customer doesn't pay? It just stops, and tries to get you to pay back the original loan. No more compounding.

That's a big difference. I you think charging $30 total interest for an instant $200 loan to someone with bad/no credit is evil and doesn't make a difference, you probably don't understand the realities of what people would have to do if LendUp weren't there.

LendUp is run legally as a licensed lender in California. The shady legal structures in native american nations is what they're fighting. I'm damn proud to have spent a couple of years trying to solve it.

[anonnel]

> LendUp is run legally as a licensed lender in CA.

Okay? ... every company has the same licenses. CashNetUSA, Quickloans, Captain America Loans, and hundreds of other companies. Including even most with the shady legal structures, based in Malta, etc. Google won’t list the Deleware ones either. Advertising platforms don’t like them. Cities don’t like them. Regulators watch them closely and frequently press charges.

> I’m damn proud to have spent a couple of years trying to solve it.

Look this is probably going to seem uncivil, but given the poor ethics of what you are talking about, I have no qualms shaming.

I spent a few years founding a payday business. Ultimately, despite having the same “forgiveness” policies and “innovative” loan structures, and telling myself all the same junk you are telling yourself (CFSA PR propaganda) I couldn’t bring myself to treat poor people like a crop to be harvested. You know that forgiveness or not, the majority of borrowers are repeats, and that there is a huge incentive to maximize this. Essentially, people use you instead of a bank.

There is no escaping that this means you are in the business of siphoning 10% off of an already poor person’s wages on an ongoing basis, and that’s without compounding. (Sounds like 15% by your numbers)

Do you really feel good that you did this? You drank some silicon valley koolaid, worked as someone else’s employee and harvested poor people? And then acted as the company’s mouthpiece afterward? Because you want to feel congruent with your resume?

Before you say I don’t know blah blah about LendUp ... hear this: A great many Payday companies came before LendUp, attempting the PR of being “ethical” and “innovative”, with the same practices. And by far they have not been the last. They’re all still in the business of fleecing at least 10% off of the people who can afford it least. There’s always money in stealing from the poor. The only innovative thing they did was to con YC. (hi)

Do not deceive yourself or others. It is not an honorable business. It is a called a VICE INDUSTRY for a reason, and you guys didn’t do anything to “solve” it (by your own admission of the word “trying”).

I know ... you want to stand by what you did, but if I were you, I would put that one in the rear view.