Opportunity Financial (OppFi), also known as OppLoans, is embroiled in controversy due to its alleged failure to disclose exorbitant online personal loan rates and its use of a "rent-a-bank" loan origination model to evade state interest rate and usury laws. This case centers around allegations that OppFi, as an online lender, engages in predatory lending practices, exploiting loopholes to charge interest rates far above what would be legal in many states, while hiding these practices from consumers.
We allege that OppFi partners with small FDIC-insured banks in states not subject to interest rate caps. While OppFi advertises to prospective borrowers and processes the loan applications, the bank originates the loans and then quickly sells them back to OppFi, which then services and collects on the loans. This partnership is a means for OppFi to circumvent state laws that would otherwise prohibit the high interest rates it is charging.
State usury laws exist to protect consumers from excessively high interest rates. By using this model, OppFi is allegedly able to issue loans with interest rates that greatly exceed these caps—rates that are not adequately disclosed to borrowers. As a result, customers who obtain loans from OppFi find themselves saddled with significant, unexpected debt burdens.
The case contends that OppFi’s actions violate several federal and state regulations. Key among these are the Truth in Lending Act, which requires lenders to clearly disclose loan terms and costs to consumers, and state usury laws, which cap interest rates. OppFi's supposed lack of transparency about its loan rates and the evasive tactics employed through the "rent-a-bank" scheme form the basis for these allegations.
We are pursuing private arbitration claims against OppFi on behalf of its borrowers who accepted loans that were offered to them without disclosures that the high interest rates exceeded the interest rate limit cap authorized in the borrower’s state of residence. Successful claims could be entitled to compensation of up to $1,000, along with additional damages depending on your state of residence.
