WASHINGTON — Nearly 100 consumer, civil rights and community organizations are urging Congress to oppose efforts they said would expand high-interest lending nationwide—as 160%–including applications by two nonbank lenders seeking to become national banks.
In a joint letter, the groups said Congress should reject applications by Enova and OppFi, arguing the companies could use national bank charters to bypass state interest-rate caps and offer loans with annual percentage rates exceeding 100%.
The organizations said, “strong bipartisan majorities of the American public support interest rate limits,” calling them “the simplest and most effective way to stop unaffordable lending.”
160% APRs
The coalition said the Trump administration and some members of Congress are considering policies that “would spread loans of 100% to 160% APR and higher across the country in defiance of laws in both red and blue states.”
According to the groups, Enova — which owns CashNetUSA, NetCredit and OnDeck — currently offers loans carrying rates ranging from about 100% to 300% APR through some of its brands. The organizations also alleged that more than half of Enova’s loans are charged off, which they said demonstrates the unaffordability of the products and a failure to adequately assess borrowers’ ability to repay.
The groups also criticized OppFi, which they said offers loans with rates of 160% APR and higher.
Avoiding State Laws
According to the letter, both companies have sought approval from the Office of the Comptroller of the Currency and the Federal Reserve Board to acquire banks and become national banks. The coalition said national bank status could allow the companies to avoid complying with state interest-rate laws.
“These would be the first national banks dedicated to directly making predatory loans and could open the national bank charter to a host of other predatory lenders,” the organizations wrote.
The Recommendations
The coalition urged Congress to:
- Oppose Enova’s and OppFi’s efforts to become national banks
- Enact a national 36% APR cap while allowing states to impose stricter limits
- Close what the groups described as loopholes that exempt banks from state interest-rate laws.
The organizations also called on lawmakers to oppose Sen. Bernie Moreno’s American Lending Fairness Act, which they said would limit states’ ability to restrict high-cost lending by out-of-state state-chartered banks.
At the same time, the groups voiced support for legislation sponsored by Sen. Sheldon Whitehouse that would require national and state banks to comply with state interest-rate caps, as well as Sen. Jack Reed’s Predatory Lending Elimination Act, which would extend a 36% APR cap similar to protections under the Military Lending Act to veterans and other consumers.
‘Last Thing They Need’
“With people struggling to make ends meet, the last thing they need is predatory bank lending,” the groups wrote. “Congress needs to step up to address the affordability crisis by stopping banks from making high-cost loans, restoring and defending the ability of states to protect people, and capping interest rates nationally.”
