Accountable.US, Americans for Financial Reform, Center for Responsible Lending, Consumer Action, Consumer Federation of America, National Consumer Law Center (on behalf of its low- income clients), National Community Reinvestment Coalition, Public Citizen, US PIRG and the Woodstock Institute submitted comments for the Community Reinvestment Act (CRA) examination of First Electronic Bank. First Electronic Bank helps at least two nonbank lenders make predatory loans at rates up to 180% annual percentage rate (APR) that they cannot legally make directly. The loans that First Electronic Bank facilitates are not only usurious; they also pose a host of other consumer protection problems and potential legal violations.

The comment letter focuses on two of First Electronic Bank’s partners: Opportunity Financial (“OppFi”) and Applied Data Finance, dba Personify (“Personify”). Together with these nonbank lenders, First Electronic Bank makes loans with rampant problems, including unaffordable loans that consumers cannot afford to repay, high default rates, debt collection abuses, credit reporting errors, and loans made as a result of identity theft. While not analyzed in the letter, we note that Genesis FS Card Services, Inc., which offers credit cards issued by First Electronic Bank, has also generated an enormous number of complaints to the CFPB: 1,824, mostly in the last year.1 Many of these seem to be the result of identity theft or unsolicited cards.

Section I of the comment letter summarizes the types of problems revealed in complaints against these lending partners. Sections II and III provide examples of complaints against OppFi and Personify, respectively. Appendices provide more complete lists of complaints. These complaints raise serious concerns about extensive consumer harm and potential violations of federal and state consumer protection statutes. First Electronic Bank deserves a downgrade in its CRA rating as these lending programs do not meet the convenience or needs of the community.

The groups also submitted the comments to the Utah Department of Financial Institutions and urged the Department to stop First Electronic Bank from enabling predatory loans and from allowing itself to be used by nonbank lenders to evade state consumer protection laws.