Unprecedented bids could create the first national banks dedicated to predatory lending

WASHINGTON, D.C. — More than 60 consumer, civil rights, labor, small business, legal services and community groups, and academics yesterday urged the Federal Reserve Board of Governors to hold public hearings and take a vote of the governors on the bids of two Chicago-based, high-cost lenders, Enova International and Opportunity Financial (“OppFi”), to acquire national banks.

The Federal Reserve is currently reviewing the application of Enova International (which owns the CashNetUSA, NetCredit and OnDeck brands) to acquire Grasshopper Bank, and the Fed is expected to shortly receive OppFi’s application to acquire BNC Bank. If approved, the fintech lenders would become the first national banks dedicated to predatory lending, with rates from 100% to 160% APR or higher.

The groups warn that the Enova and OppFi proposals are unprecedented on a number of fronts, as they would create the first national banks whose core business models focus on:

  • Astronomical rates that could reach 100% to 160% annual percentage rates (APRs) or higher.
  • Loans at rates prohibited by up to 45 states, depending on the size of the loan.
  • Unaffordable loans with high charge-offs of 50% to 60%.
  • High refinancing rates, further demonstrating the unaffordability of the loans.

“These applications are extremely controversial – 106 organizations signed a letter opposing allowing Enova and OppFi to become national banks,” said the groups. “Before the Board considers these unprecedented applications and makes a decision that could devastate consumers nationwide, it is incumbent on the Board to hear from the communities that will be impacted.”

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Press Contact: Matthew Kravitz matthew.kravitz@responsiblelending.org