Consumer groups urge Congress to block ‘predatory’ bank charters, cap loan rates nationwide
Advocates are also pressing lawmakers to adopt a national 36% interest-rate cap and protect states’ rights to impose stricter lending limits.
The groups warn the move could allow lenders charging 100% to 300% APR loans to bypass state interest-rate caps across the country.
A coalition of more than 100 advocacy organizations is calling on Congress to crack down on high-interest lending, warning that pending bank charter applications by Enova and OppFi could dramatically expand access to triple-digit-interest loans nationwide.
In a letter sent to lawmakers Thursday, the groups said the lenders’ efforts to become national banks would allow them to sidestep state interest-rate caps that currently restrict or prohibit many high-cost loans.
“These would be the first national banks dedicated to directly making predatory loans,” the organizations wrote, warning that approval could open the door for other high-cost lenders to seek similar treatment.
The coalition includes consumer advocates, civil rights organizations and community groups concerned about the growing use of loans carrying annual percentage rates exceeding 100%.
What the groups are asking Congress to do
The organizations urged Congress to:
Oppose Enova and OppFi’s efforts to obtain national bank charters;
Pass a national 36% APR cap while preserving states’ ability to enact stricter limits;
Close legal loopholes allowing some banks to evade state interest-rate laws;
Reject legislation that would expand exemptions from state lending protections.
The groups also urged support for several Democratic-backed bills aimed at tightening consumer lending rules.
Among them are Sen. Jack Reed’s Predatory Lending Elimination Act, which would extend the Military Lending Act’s 36% interest-rate cap to all consumers, and Sen. Sheldon Whitehouse’s Empowering States’ Rights to Protect Consumers Act, which would require banks to comply with state interest-rate caps.
At the same time, the coalition urged lawmakers to oppose Sen. Bernie Moreno’s American Lending Fairness Act, arguing it would weaken states’ authority to curb high-cost lending by out-of-state banks.
Focus on Enova and OppFi
The letter singles out Enova — parent company of CashNetUSA, NetCredit and OnDeck — and OppFi as examples of lenders that could significantly expand high-cost lending if granted national bank status.
According to the groups, Enova’s consumer lending brands offer loans with rates ranging from 100% to 300% APR. The organizations also cited company charge-off rates exceeding 50% on some loans as evidence that many borrowers cannot afford repayment.
OppFi, another online lender, was criticized for offering loans with rates exceeding 160% APR.
Currently, both companies must comply with varying state interest-rate laws. But under existing federal banking rules, national banks can often export interest rates from their home states and avoid stricter caps elsewhere.
Consumer advocates argue that structure could undermine protections in dozens of states that have adopted lower rate caps.
Affordability crisis fuels debate
The push comes as policymakers increasingly debate the role of high-cost lending amid rising consumer debt, inflation pressures and affordability concerns.
Supporters of strict rate caps argue that triple-digit-interest loans trap financially vulnerable consumers in cycles of debt. Industry supporters, however, have argued that tighter limits could reduce access to credit for borrowers with poor credit histories who may not qualify for traditional loans.
The advocacy groups said strong bipartisan public support exists for interest-rate caps and accused federal regulators and some lawmakers of moving in the opposite direction.
“With people struggling to make ends meet, the last thing they need is predatory bank lending,” the letter states. “Congress needs to step up to address the affordability crisis by stopping banks from making high-cost loans.”