FEDERAL COURT, Nov 3 — Fair Finance Watch
filed a comment with the Federal Reserve, US Office of the
Comptroller of the Currency and FDIC opposing a part of
the proposal of OppFi Inc. to acquire BNCCORP, Inc. and
its subsidiary BNC National Bank of Glendale, Arizona in a
$130 million cash-and-stock transaction.
On November 3 OppFi announced that it
has withdrawn its applications. OppFi blamed
“communication restrictions inherent in the application
process and the lack of articulated objective standards
against which federal regulators are evaluating OppFi’s
business.†CEO Todd Schwartz said: “We believe that our
applications satisfied the existing statutory criteria for
approval, but there is a lack of clearly articulated
standards.†OppFi said it will now “substantively engage
with federal regulators regarding the creation of
practical market- and consumer-based standards.â€
The standards complaint is the same one
Enova International made on Sept. 14, when it withdrew its
own OCC and Federal Reserve applications to buy
Grasshopper Bancorp. Enova’s CEO Steve Cunningham said
regulators lack clear standards for nonbanks seeking
charters, and that the process is “susceptible to
political pressure and outside advocacy.†OppFi’s release
does not use those words, and it does not address the
questions regulators put to it. Those included the Fed’s
second round, which asked which ten additional states
OppFi hoped to enter, and FFW’s objections to the
rent-a-bank structure, the national charter’s preemption
of state rate caps, and rates of up to about 198% on
OppLoans, originated through FinWise Bank of Utah. BNC
reported 89 home mortgage loans to white borrowers and
none to African Americans nationally in 2024.
The Enova case is the other half of this story. Inner City Press sued the Fed in Lee v. Board of Governors, 26-cv-4556 (AT) (RWL) in the Southern District of New York, over its blanket redaction of the eight-page Additional Information letter it sent Enova. On Oct. 6, Magistrate Judge Robert W. Lehrburger recommended that the Fed’s summary judgment motion be denied in part. He wrote that “most of it is not information subject to FOIA exemptions 4 and 6,†that the confidential material is “but a small fraction of the entire content†and that “the scale of redactions far exceeds that which is warranted.†He recommended that the Fed “promptly produce to Plaintiff a new version of the Letter Request that redacts only targeted, specific, discrete confidential information such as individual names, addresses, dollar amounts, and the like.†The Fed did not simply comply. Its lawyers asked Judge Analisa Torres for more time to object, telling her the Board “has been reviewing the AI Letter and consulting with Enova about what, if any, redactions … the Board may be able to lift.†Judge Torres set Oct. 27 for the objections, and the Fed filed them that day. Inner City Press agreed to only one week of the two weeks requested, noting that the requests date to February and that the news value of the records “declines with delay.†OppFi’s complaint is about secrecy as much as standards: it cites “communication restrictions†in the process, and the public cannot test the Fed’s questions to applicants while they stay redacted. Inner City Press and FFW will continue to press for the Enova letter and for the OppFi and BNC supplements that remain withheld
The Federal Reserve asked
OppFi questions. Inner City Press published the Fed's
letter on its DocumentCloud here.
(It refers to a "confidential section,"
which Inner City Press has now requested under FOIA, even
as it pursues the Fed's questions to Enova. Why so much
secrecy for predatory lenders? Isn't that what got the
Fed, and the global economy, into so much trouble in
2007-08?)
On August 11 OppFi's lawyers wrote
in that "OppFi and BNC National Bank have determined that
OppFi Bank will be able to make the greatest impact in its
communities through implementation of a CRA strategic
plan" - because the OCC is so law on strategic plans. This
is a sidestep; public hearings are need and the
application should be denied. Fair Finance Watch on August
11 filed with all three agencies, saying the application
should be withdrawn until September 18, and a new comment
period begun.
On August 26 OppFi submitted another
response with many exhibits withheld. Now here.
Inner City Press immediately submitted a FOIA
request. Asked directly why OppFi currently
cannot facilitate consumer loans in ten states where it
operates in the other forty, the company's public answer
says only that its bank partners made "independent
evaluations of state-specific statutory frameworks" and
"internal risk parameters" — without naming a single state
or a single specific legal barrier — before directing the
Fed to "Confidential Supplement 7 for additional
information." That pattern repeats across at least six
other questions in the same letter: a generic public
deflection, followed by a hidden supplement containing
whatever OppFi actually told the Fed. Inner City Press has
filed a FOIA request for all seven confidential
supplements, expressly citing its pending federal lawsuit
against the Board over an identical practice in a separate
merger application. Watch this site.
October 8: the Federal Reserve Bank of
Chicago has sent OppFi a second round of questions, and
the public portion shows the secrecy was broader than the
record let on. Question 1 says the confidential portion of
the application "contains information and exhibits that
can be released in whole or in part but were not included
in the public portion," and orders a revised public
version. Question 2 says "several IBFRs that were provided
are considered materially deficient" for judging the
managerial factor. The Fed also asks where the
"immediately available funds" for the cash consideration
come from, wants the SEC prospectus that has not been
filed, asks whether OppFi's loan terms will change at the
bank, and asks again which ten additional states OppFi
hopes to enter. Answers are due October 20. The public was
invited to comment without most of this. Fair Finance
Watch has asked the Board to reopen the comment period
until 30 days after the revised public record is posted,
and has filed a FOIA request for the letter's confidential
section. The Fed also said that future public
correspondence "will not be separately distributed to
individual commenters," so the public must check its
reading room. The Board has been here before. On
October 6, a magistrate judge recommended that it produce
a narrowly redacted version of its Enova letter, finding
"most of it" not exempt, after the Board sought to vacate
his earlier ruling... The Federal Reserve: hitting new
lows daily. Watch this site
The Fed's 's first written round of
additional information questions to OppFi, sent through
Sidley Austin partner Michael D. Lewis, is now public —
and one question all but confirms the rent-a-bank evasion
theory this application has raised from the start. OppFi's
own public filing states that "OppFi expects to be able to
offer products in the OppLoans business line in as many as
ten additional states where it is currently unable to
facilitate consumer loans through its platform." The Fed's
question back: "Clarify the rationale as to why Applicant
[is] currently unable to offer consumer loans or consumer
lending products in the ten additional states."
OppFi did not say why in its own filing.
The likely answer — state usury caps its current
bank-partnership model cannot get around, but a national
bank charter of its own could — is exactly what a bank
charter would let OppFi do that renting one from a partner
bank cannot. The Fed's questions also probe two
newly surfacing entities, "Oak Interim Bank" and "Birch
Bank," referenced in the merger agreement but not clearly
identified in the public organizational charts, and ask
OppFi to produce the final Bank Merger Agreement, still in
draft form in the confidential exhibits filed to date.
Written answers are due August 8, 2026 — a deadline Inner
City Press will be watching, and a FOIA request for
whatever portion of the answers OppFi tries to withhold is
already prepared.
Opportunity Financial is
a Chicago-based fintech company that offers personal
installment loans at interest rates of up to 195-198% APR.
That is not an estimate. It is documented in state
enforcement records, federal consumer complaint databases,
and OppFi's own SEC filings. The District of Columbia
Attorney General sued OppFi in 2021, alleging it charged
DC residents up to 198% APR — more than eight times DC's
24% legal cap.
OppFi settled for over $2 million,
including $1.5 million in refunds to more than 4,000
borrowers and over $640,000 in waived interest.
California's Department of Financial Protection and
Innovation filed its own complaint. Illinois documented
OppFi charging 159.5% APR in defiance of the state's
Predatory Loan Prevention Act.
OppFi's historic business model is a
"rent-a-bank" scheme. It partners with out-of-state banks
— most recently FinWise Bank, a Utah-chartered institution
with no state usury cap — to originate loans, then
acquires 95% or more of each loan through a participation
agreement. The out-of-state bank appears on the paperwork;
OppFi holds the economic risk and the profit. State
regulators have repeatedly challenged this structure.
Courts have found that OppFi, not its bank partner, is the
"true lender."
Now OppFi wants to stop renting a charter
and buy one. BNC National Bank is a nationally chartered
commercial bank with approximately $1.1 billion in total
assets and $1.0 billion in deposits. A national bank
charter comes with OCC preemption authority — the ability
to make loans under federal law rather than state law,
charging rates that state usury caps would otherwise
prohibit. OppFi CEO Todd Schwartz said the deal
"simplifies and strengthens our compliance and risk
management." The "compliance" being simplified is the
ongoing legal pressure in California, Illinois, DC, and
elsewhere challenging the rent-a-bank model.
OppFi says it serves customers who are
"underserved by traditional financing options." FFW
submits that charging those same consumers 160% APR is not
serving them — it is profiting from their lack of
alternatives. The Community Reinvestment Act requires the
Federal Reserve to evaluate whether an acquiring
institution has met the credit needs of its communities.
Triple-digit APR installment loans concentrated among
non-prime and LMI borrowers are not a CRA record. They are
a predatory lending record.
As Inner City Press has noted, the OCC
recently shut down its Community Affairs email box. FFW has asked the OCC for public hearings...
As noted, these requests are also made in
the context of the Federal Reserve Board's lack of
transparency on the pending, somewhat similar application
by Enova to acquire Grasshopper Bank. There, FFW commented
early. But the Board withheld all substantive portions of
its February 2, 2026 Additional Information letter to
Enova. Inner City Press requested all segregable portions
under FOIA; this was denied. Inner City Press appealed;
this was denied. Having no other choice, I filed a FOIA
lawsuit in SDNY, Lee v. Board of Governors of the Federal
Reserve System (1:26-cv-04556) District Court, S.D. New
York. The Complaint was signed for by the Fed on June 9,
and on June 10 I emailed a courtesy copy to the Board's
Legal Division, asking that a notice of appearance be made
by the Fed.
But it has been an Assistant US Attorney. A conference was
held and the Fed was ordered to submit its redacted letter
to the Judge for review. Then the Fed belatedly issued
some limited unredaction. Too little, too late. The
lawsuit proceeds, even after Enova withdrew. And here?
