WASHINGTON – A consumer group is urging the Office of the Comptroller of the Currency (OCC) to deny the application of Enova International for national bank charters, saying it if is approved its subsidiary institutions would be able to offer its 100% to 300% APR loans across the country and ignore state laws nationwide.
Enova International is parent to CashNetUSA and NetCredit.
In comments submitted Friday to the OCC, the National Consumer Law Center (NCLC) voiced its objections.
“During an affordability crisis, when President Trump has supported a 10% cap on credit card rates, his administration must reject a new national bank that charges 100% to 300%,” Lauren Saunders, associate director of the National Consumer Law Center, said in a statement. “It would be unprecedented for the Trump Administration to sanction a 100% APR bank.”
According to the NCLC, through its CashNetUSA and NetCredit brands, Enova makes installment loans and lines of credit at rates that reach 100% to 300% APR.
‘Astoundingly High Charge-Offs’
“It has an astoundingly high charge-off rate over 50%, revealing a predatory and highly deceptive business model that traps people in unaffordable loans,” the consumer group said. “If Enova is allowed to acquire Grasshopper Bank and become a national bank based in Utah, federal law would allow Enova to charge these high rates, without any limit, anywhere in the country. Currently, 45 states prohibit those rates on many installment loans.”
An ‘Assault’
The NCLC said approval of Enova’s predatory 100% APR bank “would be an assault on people across the country and political spectrum who are worried about the affordability crisis and strongly support state interest rate limits.”
The NCLC urged support of legislation before Congress to cap interest rates at 36% as well as support for Senator Whitehouse’s bill to require national banks to comply with state interest rate limits.”
