Fintech Lenders Facing New Scrutiny

Turns out, online lions and lending bears charge predatory interest rates

Andy Spears
3 min readJul 10, 2022
Photo by MARIOLA GROBELSKA on Unsplash

The fintech industry — nonbank and neobank entities offering services (like short-term loans) that are similar to bank offerings — is facing new scrutiny.

This according to the latest report in Fintech Business Weekly:

The CFPB has also recently upped its rhetoric on so-called “rent-a-bank” arrangements used by fintech lenders, particularly those using them to originate loans above states’ usury caps.

While the lending question is somewhat distinct from “banking-as-a-service,” the consumer regulator could see them similarly, particularly as fintechs like Dave (partnered with Evolve) and MoneyLion (partnered with MetaBank) offer short-term loans and as more BaaS platforms offer credit products.

I’ve written a lot about these “rent-a-bank” schemes and about fintech lenders like Dave and OppFi and their persistence in finding ways to evade state interest rate caps and charge triple-digit interest rates on short-term loans.

Don’t Mess with Texas: Fintech Lender OppFi Sued for Charging 130% Interest on Loans | by Andy Spears | Jul, 2022 | Medium

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Andy Spears

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