The Center for Responsible Lending and the National Consumer Law Center strenuously object to the national bank charter application of Avant Bank, NA. For the reasons set forth herein, the FDIC and OCC should reject that application on the grounds that it significantly fails to meet statutory factors under the National Bank Act and each agency’s respective policy considerations. If the OCC and FDIC are not persuaded on the face of the application that it should be disapproved, we respectfully request a public hearing to fully develop the record and allow the public an opportunity to be heard on this matter.
Our primary concerns are as follows:
- Avant has an 18% projected loan default rate included in its securitization,4 which is inconsistent with national bank standards and exponentially greater than the 2.7% delinquency rate among smaller banks.
- Avant offers loans of $2,000 to $35,000 at nearly 36% APR, with finance charges approaching the borrowed principal—an inappropriately large APR and finance charge for loans of this size.
- Avant extracts a nonrefundable, prepaid finance charge--an "administration fee” of up to 9.99%--deducted from the loan proceeds before disbursement. Borrowers then pay interest on this fee.
- Avant was among the most frequently listed rent-a-bank lenders in North Carolina personal bankruptcy filings from 2018 to 2023.
- Avant has faced state and federal enforcement actions involving violations of state interest limits, abusive debt collection practices, and unfair or deceptive practices, including unauthorized withdrawals and misleading representations about payments and fees.
- Avant’s application seeks to bring the credit products it currently offers through its partnership with Utah-chartered WebBank under its own national bank charter, allowing Avant to bypass state interest rate protections that apply to nonbank lenders and that its existing bank-partnership model has been challenged for circumventing.