The Trump administration has turned many federal agencies and regulatory processes upside down.
Here’s another one.
The Federal Reserve is currently reviewing the application of Enova International, which owns the CashNetUSA, NetCredit, and OnDeck brands, to acquire Grasshopper Bank. In addition, the Fed is expected to receive Opportunity Financial’s application to acquire BNC Bank.
If approved, the fintech lenders would become the first national banks dedicated to predatory lending, with rates from 100 percent to 160 percent annual percentage rates, or APR, or higher.
More than 60 consumer, civil rights, labor, small business, legal services and community groups, and academics Monday urged the Federal Reserve Board of Governors in a letter to hold public hearings and take a vote on the bids of Enova International and Opportunity Financial to acquire national banks.
The groups warn that the Enova and Opportunity Financial proposals are unprecedented in many ways as they would create the first national banks whose core business models focus on:
- Astronomical rates that could reach 100 percent to 160 percent APRs or higher.
- Loans at rates prohibited by up to 45 states, depending on the size of the loan.
- Unaffordable loans with high charge-offs of 50 percent to 60 percent.
- High refinancing rates, further demonstrating the unaffordability of the loans.
“These applications are extremely controversial – 106 organizations signed a letter opposing allowing Enova and OppFi to become national banks,” the groups said in their letter. “Before the Board considers these unprecedented applications and makes a decision that could devastate consumers nationwide, it is incumbent on the Board to hear from the communities that will be impacted.”
