FTC sues LendingClub for alleged hidden fees

A U.S. regulator sued online lender LendingClub on Wednesday for allegedly overcharging consumers and misleading them on hidden fees.

The Federal Trade Commission said in a complaint filed in federal court in California that LendingClub deducted hidden fees from the loans it issued to borrowers, despite promising “no hidden fees.” The lender also allegedly deducted payments automatically from consumers’ bank accounts even after they had paid off their loans or had canceled automatic payments, according to the complaint. Some consumers were allegedly charged double payments, the complaint said.

The San Francisco-based start-up is one of the largest of the peer-to-peer lenders and runs a website where consumers can apply for loans that are funded by individual investors or by institutions such as banks.

“In this case, we believe the FTC is wrong, and are very disappointed that it was not possible to resolve this matter constructively with the agency’s current leadership,” a spokesman for LendingClub said in a written statement.

The FTC alleges that “hundreds or even thousands of dollars” in upfront fees were subtracted from the loans disbursed to consumers. LendingClub was allegedly aware that many consumers did not know about these upfront fees, according to the complaint.

— Reuters


Thiel agrees not to bid on Gawker's assets

Peter Thiel has agreed not to bid on the assets of bankrupt Gawker Media in exchange for the Web publisher’s promise to end an investigation into the tech billionaire.

The accord between Thiel and Gawker’s estate clears an obstacle to the company selling its assets in bankruptcy, according to papers filed Wednesday in U.S. Bankruptcy Court in New York. Thiel had expressed interest in buying the company’s remaining assets as a way to shut down the probe, and his involvement could have discouraged other potential bidders, an administrator for the estate said in court papers.

The defunct website was looking into Thiel’s and his lawyer’s role in funding the lawsuit that led to its demise. Gawker filed for bankruptcy in 2016, blaming a $140 million invasion-of-privacy lawsuit from former pro wrestler Hulk Hogan that Thiel funded.

— Bloomberg News


Twitter reports second profitable quarter ever

Twitter, driven by strong growth overseas, swung to a profit during the first quarter of the year, its second profitable quarter ever. But the company’s stock tumbled more than 6 percent when the market opened, reversing premarket gains.

For the three months ended March 31, Twitter earned $61 million, or 8 cents per share. A year earlier, the San Francisco company lost $61.6 million, or 9 cents per share.

Revenue increased sharply to $664.9 million from $548.3 million, bolstered by a 53 percent jump in international revenue. Analysts had projected $609.9 million in revenue.

Daily active users increased 10 percent, down from 12 percent growth in the fourth quarter and 14 percent growth a year ago. Twitter had 336 million monthly average users in the quarter, up from the 330 million in the previous quarter and the 319 million users a year earlier.

— Associated Press

Also in Business

Chipotle Mexican Grill, which has been working to revive its business after past food safety scares, says a key sales figure rose as it increased prices in most of its restaurants. After the results were released, shares of Chipotle soared nearly 8 percent in extended trading Wednesday. The burrito chain said sales rose 2.2 percent at existing locations during the first three months of the year. Analysts expected the figure to rise 1.3 percent, according to FactSet. Chipotle also reported first-quarter earnings and revenue that beat Wall Street expectations.

Bank of America's new policy denying loans and other services to certain gunmakers came after dozens of employees lost family members or suffered other trauma related to mass shootings in recent years, chief executive Brian Moynihan said Wednesday at the company's annual meeting in Charlotte. Employee help centers provided services to 151 workers affected by shootings in Orlando, Las Vegas and other sites, according to the company. Moynihan was responding to a questioner who criticized the new policy as "following the whim of the moment" and not looking out for the long-term interests of shareholders. Bank of America said this month it would stop lending to companies that make assault-style guns used for nonmilitary purposes.

— From news reports

Coming today

8:30 a.m.: Commerce Department releases durable goods for March.

10 a.m.: Freddie Mac releases weekly mortgage rates.

Earnings:, American Airlines, General Motors, Microsoft, PepsiCo, Southwest Airlines, Starbucks, Union Pacific, UPS.