WASHINGTON — Online lender Opportunity Financial, known as OppFi, has dropped its proposed acquisition of BNC Bank, a deal consumer groups said would have let the company make loans at 195% annual interest in all 50 states, a coalition of advocacy organizations said Nov. 3.
The National Consumer Law Center, Americans for Financial Reform, the Consumer Federation of America, the Center for Responsible Lending and Fair Finance Watch said in a joint statement that a broad coalition had urged Congress and federal bank regulators to reject the deal. The groups argued that OppFi would have used BNC’s national bank charter to sidestep state interest rate caps.
OppFi is the second such lender to back away from a bank purchase this fall, according to the groups. They said Enova International ended its proposed acquisition of Grasshopper Bank in September amid similar public pressure.
“OppFi and other fintech lenders must not be allowed to turn a national bank charter into a license to ignore state rate caps and prey on people struggling to make ends meet,” said Lauren Saunders, senior attorney at the National Consumer Law Center.
Tom Feltner, associate director of consumer policy at the Americans for Financial Reform Education Fund, warned that other companies are still seeking to use the banking system for products ranging from buy-now-pay-later loans to “novel crypto charters.”
“Federal regulators must stand up for people and communities rather than rubber-stamp special privileges for tech companies looking to play by their own rules,” Feltner said.
Adam Rust, director of financial services at the Consumer Federation of America, said, “With Enova first and now OppFi, the lesson to be drawn is that national bank charters can not be granted to predatory lenders.”
Matthew R. Lee, executive director of Fair Finance Watch, said his group is pursuing a Freedom of Information Act lawsuit against the Federal Reserve over what he described as the withholding of eight pages of the Fed’s questions to Enova. “Will the same be necessary to test OppFi’s public claims?” Lee said.
Katelin Kaiser, policy counsel at the Center for Responsible Lending, called on federal regulators to “clearly state that high-cost lenders cannot use a national bank charter to override state protections against high-cost loans.”
New Jersey is among the states that cap interest rates on consumer loans.
This report is based on information from Americans for Financial Reform and the National Consumer Law Center.
Source: Americans for Financial Reform
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