OppFi Seeks Bank Charter to Expand High-Interest Lending
Lender OppFi is seeking approval to acquire BNC Bank and operate as a national bank, a move that could allow it to offer loans with interest rates exceeding California's limits.
Opportunity Financial (OppFi), a lender known for offering installment loans with annual percentage rates (APRs) of 160% or more, has applied to acquire BNC Bank and become a national bank. The company aims to leverage federal banking laws applicable to national banks for its lending operations.
If approved, this move could allow OppFi to bypass state-specific lending regulations, potentially enabling it to offer loans in California with interest rates that exceed the limits set for many state-licensed lenders. This development is being monitored by Khan Law, a firm specializing in bankruptcy cases, which notes the potential impact on California consumers struggling with debt.
High-interest loans can trap borrowers in a cycle of debt, where a significant portion of payments covers interest rather than principal. This can lead to reliance on further credit, collection actions, and severe financial hardship. OppFi's application follows a similar move by Enova to acquire Grasshopper Bank, suggesting a potential trend of nonbank lenders seeking federal bank charters.
Khan Law advises individuals struggling with unmanageable high-interest debt to explore their legal options promptly. The firm offers assistance with bankruptcy relief and other solutions available under federal law to help clients achieve financial stability.