Maryland Attorney General Anthony G. Brown has joined a coalition of 17 attorneys general urging federal regulators to deny Opportunity Financial’s application to acquire and merge with BNC National Bank.
The coalition sent letters to the Office of the Comptroller of the Currency and the Federal Reserve Board opposing the proposed transaction, which would give Opportunity Financial, also known as OppFi, a national bank charter.
OppFi is an online lender that offers installment loans to consumers, including borrowers with low credit scores or financial difficulties. According to the attorneys general, some of the company’s loans carry annual percentage rates approaching 200%.
The coalition argues that obtaining a national bank charter would allow OppFi to expand its high-interest lending and avoid some state lending restrictions.
According to the letters, 45 states and the District of Columbia have laws restricting high interest rates. Maryland law prohibits consumer loans with annual percentage rates above 33% for loans under $2,000.
OppFi currently partners with state-chartered banks in Utah, which does not have a fixed interest-rate cap. The attorneys general said those partnerships allow the company to offer loans in other states based on interest rates permitted under Utah law.
OppFi is seeking to acquire nationally chartered BNC National Bank and plans to relocate the bank’s headquarters to Utah. Under the National Bank Act, nationally chartered banks can generally charge interest rates permitted in their home state.
The attorneys general said approval of the acquisition could allow OppFi to offer triple-digit interest loans nationwide despite state rate caps. They also raised concerns about consumer protections and the effect the transaction could have on the banking system.
Joining Brown in the letters are attorneys general from Arizona, California, Connecticut, the District of Columbia, Illinois, Maine, Massachusetts, Michigan, Minnesota, New Jersey, North Carolina, Oregon, Rhode Island, Vermont, Virginia and Washington.
