Opportunity Financial, also known as OppFi, is a consumer lending company based in Chicago, Illinois that offers personal installment loans. Although OppFi’s stated mission is to “empower everyday consumers to rebuild their financial health,” OppFi is a legacy subprime lender. The company uses a rent-a-bank scheme to evade consumer protections and charge customers triple-digit interest rates on its personal installment loan product. In a rent-a-bank scheme, a lender partners with an out-of-state bank. The lender uses that bank’s charter to make loans at rates up to five times greater than the 36% rate cap in place in many states where they operate. With 95% of their loans made through rent-a-bank arrangements, OppFi predominantly relies on these bank partnerships to make high-cost loans to consumers in states that have prohibited such loans, due to their propensity to create a debt trap.
Despite professing to provide an essential service to the credit and income constrained, OppFi saddles its customers with high-priced debt that is often difficult for borrowers to repay on time while meeting other financial obligations. This can lead to delinquency, default, or missed payments on other debts, which in turn can lead to late fees and sometimes debt collection lawsuits. Carrying high-cost debt can also make it harder for customers to qualify for loans with better terms, thereby reducing their access to more affordable credit.