Don’t Mess with Texas: Fintech Lender OppFi Sued for Charging 130% Interest on Loans

OppFi has run afoul of interest rate caps in DC and California, too

Andy Spears
2 min readJul 7, 2022


Photo by Daniel Thomas on Unsplash

Turns out, those shiny, new, convenient fintech lenders are little more than sketchy payday loan stores dressed up in super fancy clothes.

Maybe that’s why fintech lender OppFi is again facing legal troubles.

OppFi Seeks Permission to Keep Charging Outrageous Interest Rates | by Andy Spears | Medium

This time, the lender is on the wrong side of the law in Texas. reports:

Fintech company Opportunity Financial is facing a proposed class action alleging that it sought to evade Texas state usury laws by using a “rent-a-bank scheme” that the company’s own public filings have identified as a potential problem for the company.

In a complaint filed Wednesday in Austin, Texas, federal court, Lone Star state resident Kristen Michael said that loans she’d taken out with the company, which styles its name as OppFi, had interest annual percentage rates that were over 130% despite the fact that Texas law bars unlicensed lenders from making loans with APRs higher than 30%

OppFi uses a so-called “rent-a-bank” scheme to evade state rate caps. In this setup, OppFi uses a bank in a state with no rate caps to originate the loan and OppFi becomes the “servicer” of the loan.

OppFi ran into legal trouble in DC for using such a scheme to charge 160% interest rates on loans.

The DC settlement ($2 million) resolved a lawsuit filed by the Office of the Attorney General (OAG) against OppFi for misrepresenting its high interest loans as fast and easy cash and falsely claiming that its loans would help struggling consumers build credit. Instead, from at least 2018 until May 2020, OppFi provided loans to most District residents at a 160% APR — more than seven times the District’s 24% rate cap.

This type of scheme is used by a number of predatory lenders, including EasyPay Finance, which uses Utah-based TAB Bank to offer loans for car repairs with rates up to 189%.



Andy Spears

Writer and policy advocate living in Nashville, TN —Public Policy Ph.D. — writes on education policy, consumer affairs, and more . . .