OppLoans Violates State Interest Rate Caps Thanks to “Fake Lender” Rule

Andy Spears
2 min readMay 11, 2021

A new graphic provided by the National Consumer Law Center (NCLC) demonstrates how online lender OppLoans violates state interest rate caps and charges 160% interest rates by using a “rent-a-bank” scheme. Such schemes are allowable under a Trump-era rule authorized by the Office of the Comptroller of the Treasury.

Consumer advocates are calling on Congress to take action to repeal this rule that benefits payday predators and debt trap lenders like OppLoans.

Predatory small business lenders are using the fake lender rule today to defend a 268% APR rate on loans totaling $67,000 to a restaurant owner in New York, where the criminal usury rate is 25%. OppLoans (aka OppFi), an online lender offering 160% APR loans in about 27 states that prohibit that rate, cited the OCC’s fake lender rule in defense of its loan to a disabled veteran in California, where the legal rate is 36% plus the federal funds rate. OppLoans is evading state rate cap laws supported by broad majorities of voters in Arizona, Montana, Nebraska, and South Dakota; and also laws approved by legislatures in Maine, Ohio, and other states.

Here’s the graphic showing how OppLoans is exceeding state rate caps across the country:

For more on consumer finance issues, follow Andy Spears

Andy Spears

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