Payday lender Elevate Credit has entered administration in the UK, blaming regulatory haze and the impact of the Covid-19 pandemic.
ECIL provides consumer loans in the UK under the brand ‘Sunny'.
Elevate follows QuickQuid, Wonga and the Moneyshop in exiting the payday loans industry following a tightening of regulations by the Financial Conduct Authority.
Elevate had previously complained that the lack of regulatory clarity in the UK would challenge the day-to-day operations of the company. The firm says the onset of Covid-19 has further complicated the business environment, ultimately leading to the decision to place ECIL in administration.
Jason Harvison, resident and CEO of Elevate in the US, says: “Regulators in the UK were unable to provide clarity that would allow Sunny to continue and sadly, the consumers’ choice for the most safe and reliable short-term credit option in the UK has ceased operations.”
In a statement, the FCA says it is in close contact with the firm and the administrator with regard to the "fair treatment" of customers.
"All existing loan agreements remain in place and will not be affected by the proposed administration," states the watchdog. "However, the firm is no longer able to issue new loans."
Elevate will recognise an estimated net impairment loss on its investment in ECIL of approximately $10 million, including a US federal tax benefit of $20 million.