WASHINGTON — Opportunity Financial has dropped its proposed acquisition of BNC Bank, the National Consumer Law Center said, drawing praise from consumer advocates who argued the deal would allow the lender to bypass state interest rate limits.
A coalition of consumer, civil rights, legal services and community organizations, along with academics, had urged Congress and federal banking regulators to reject the acquisition. According to NCLC, the deal would have allowed OppFi to use BNC’s national bank charter to offer loans with interest rates of 195% in all 50 states.
The withdrawal follows Enova International’s decision in September to end its proposed acquisition of Grasshopper Bank amid similar public pressure, NCLC said.
‘Every Reason for Scrutiny’
“Bank regulators and members of Congress have every reason to scrutinize predatory lenders’ business model,” said Lauren Saunders, a senior attorney at NCLC. “OppFi and other fintech lenders must not be allowed to turn a national bank charter into a license to ignore state rate caps and prey on people struggling to make ends meet.”
Tom Feltner, associate director of consumer policy at Americans for Financial Reform Education Fund, said a bank charter carries a responsibility to serve the public safely and fairly. He urged regulators to scrutinize other companies seeking access to the banking system, including those involved in buy now, pay later services and cryptocurrency.
Adam Rust, director of financial services at the Consumer Federation of America, said lower funding costs and the ability to avoid state rate caps might appeal to OppFi investors, but argued that triple-digit interest loans would not benefit the public.
A Call for More Transparency
Fair Finance Watch Executive Director Matthew R. Lee called for greater regulatory transparency. His organization opposed both acquisitions and is pursuing a Freedom of Information Act lawsuit against the Federal Reserve over eight pages of questions the agency asked Enova that Lee said were withheld.
Katelin Kaiser, policy counsel at the Center for Responsible Lending, urged federal banking regulators to make clear that high-cost lenders cannot use national bank charters to override state protections against high-cost loans.
NCLC’s announcement did not include OppFi’s explanation for ending the proposed acquisition.
