OppFi Seeks Permission to Keep Charging Outrageous Interest Rates

Company admits in legal brief it wants to exceed 36% interest

Andy Spears


Photo by Pickawood on Unsplash

Online lender OppFi — a fintech company offering a range of consumer credit products — filed a complaint this week seek injunctive relief from the California Department of Financial Protection and Innovation.

In a statement announcing the action, OppFi indicated it hopes to continue offering loans at rates exceeding California’s interest rate cap of 36%.

The loans made through the OppFi platform are constitutionally and statutorily exempt from California’s maximum interest rate caps because the loans are made by FinWise Bank, Member FDIC, a state-chartered bank located in Utah. It is well-settled federal law that permits state-chartered banks to export the interest rates allowed in their chartering state to any other state in the country.

OppFi recently reached a settlement in DC because its loans offered there exceeded the District’s rate caps.

The DC settlement 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.

Despite the recent (November, 2021) action in DC, OppFi said in relation to California:

OppFi strongly believes its practices are legal as a matter of both California and federal law, and the company looks forward to having its position affirmed in court.

OppFi claims the legal relief is necessary because the Commissioner of the California Dept. of Financial Protection and Innovation has “threatened” to enforce that state’s rate caps.

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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 . . .