UK payday lender Sunny enters administration
Payday lender Elevate Credit has taken over in the UK, blaming regulatory vagueness and the impact of the Covid-19 pandemic.
ECIL offers consumer loans in the UK under the ‘Sunny’ brand.
Elevate is following QuickQuid, Wonga and Moneyshop as they exit the payday lending industry following tightening regulations by the Financial Conduct Authority.
Elevate had previously complained that the lack of regulatory clarity in the UK would challenge the company’s day-to-day operations. The company claims that the appearance of Covid-19 further complicated the business environment, ultimately leading to the decision to place ECIL under administration.
Jason Harvison, US resident and CEO of Elevate, says: “UK regulators have been unable to provide clarification that would allow Sunny to continue and, unfortunately, consumer choice for the option of The safest and most reliable short term credit in the UK has gone out of business.
In a statement, the FCA said it is in close contact with the firm and the administrator regarding the “fair treatment” of clients.
“All existing loan agreements remain in place and will not be affected by the proposed administration,” says the watchdog. “However, the company is no longer able to issue new loans.”
Elevate will recognize an estimated loss of equity on its investment in ECIL of approximately $ 10 million, including a US federal tax benefit of $ 20 million.