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Social Finance has gone on the defensive following reports that problems within the internet financing company may go well beyond its cofounder, Mike Cagney.
Cagney on Monday resigned as chairman and announced he will step down as CEO by the end of the year amid allegations of widespread sexual harassment at the company, which is also known as SoFi. But an article in The New York Times reported on Tuesday indicated the company has more to worry about than how it treats women and detailed a series of questionable business practices.
Day - Company - Times - Letter - Website
Later that day, the company fired back at The Times via a letter posted on its website. Although it largely ignored the reports in the The Times about sexual misconduct at the company, SoFi disputed several points in the article concerning its business, saying they were inaccurate.
SoFi said it wouldn't "address every inaccuracy in the story."
Issues - Story
"However," it added, "we have some issues with the story that we want to address."
The article alleged that SoFi's growth could be attributed in part to a series of risky business lending habits. Cagney misrepresented SoFi's student loan products to investors and asked customer service representatives to review and approve personal loans, even though they were not qualified to do so, according to the article.
Letter - SoFi - Customer - Service - Representatives
But in its letter, SoFi denied that customer service representatives ever approved loans. Instead, senior loan officers have authority over whether to make loans, and the company uses proprietary algorithms that look at applicants' credit history to determine their credit worthiness, SoFi said.
The Times' reporting on the role its customer service representatives played "reflects a lack of understanding of our business," the company said.
Response - Allegations - Company - Incomes - Mortgage
In response to allegations that the company did not sufficiently vet incomes for mortgage borrowers, SoFi wrote, "This is an incredibly vague claim, and we have...
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