FEDERAL COURT, July 29 — Fair Finance Watch
has 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 — and requesting
public hearings before the OCC takes any action.
The application to the OCC is for
Opportunity Financial to set up OppFi Bank in Utah, TBD,
and merge it with BNC National Bank. FFW has commented to
the Federal Reserve [for which on July 7 notice of
appearance was filed in the SDNY in Inner City Press' FOIA
lawsuit about the Fed withholding its questions to Enova.]
Now on July 29, while the FDIC is blocking
comments through its website, the Federal Reserve has
asked OppFi questions. Inner City Press has 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?)
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
and the merits reached asap. Twenty days later, nothing.
Nothing at all.
Fair Finance Watch will submit additional
comments as the record develops. Watch this
site.
