State AGs sound alarm over Enova, OppFi buying banks | American Banker

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State AGs sound alarm over Enova, OppFi buying banks<br>By Kate Berry CloseText

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Published July 17, 2026, 6:00 a.m. EDT<br>Updated July 17, 2026, 6:02 a.m. EDT

5 Min Read

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Illinois Attorney General Kwame RaoulMustafa Hussain/Bloomberg

Key insight: A coalition of state attorneys general is asking federal banking regulators to reject Enova's proposed acquisition of Grasshopper Bank and OppFi's proposed purchase of BNC National Bank's holding company.

What's at stake: The attorneys general warn that if the nonbank lenders are able to buy banks, they could bypass state usury laws and offer predatory, triple-digit interest rate loans nationwide.

Expert quote: "Approval of these charters would mark an undeniable shift in the types of entities that enter our national banking system, and it should be cause for alarm," — letter from 20 state attorneys general, including Illinois' Kwame Raoul

Processing Content<br>A coalition of 20 state attorneys general, most of them Democrats, is urging federal financial regulators to reject proposed acquisitions of banks by high-cost installment lenders.

The state AGs sent letters Wednesday to prudential regulators, urging them to block two Chicago-based installment lenders — Enova International and Opportunity Financial, known as OppFi — from entering the traditional banking system.<br>The state officials are concerned that the two lenders will use bank acquisitions to override state usury laws.<br>"The high-cost, high-charge-off lending practices that characterize Enova's business is not traditional bank lending, and Enova should not be permitted to use a bank charter to spread such practices throughout the United States," the attorneys general wrote.<br>The letter's signatories include Illinois Attorney General Kwame Raoul, California Attorney General Rob Bonta and New York Attorney General Letitia James.

Earlier this month, James led a coalition of AGs from 15 states, including California and Illinois, in formally asking the Federal Reserve Board to hold public hearings to evaluate whether Enova's deal to acquire a bank was made to evade state consumer protections.<br>"Given the implications of these new charter applications for consumers and the broader economy, we ask that you allow ample opportunity for public comment and hold public hearings before making a decision about whether to approve their entry into the banking system," the AGs' latest letter states.<br>In December, Enova announced a deal worth roughly $369 million to buy $1.6 billion-asset Grasshopper Bank, a digital bank in New York. At the time the deal was announced, Enova said that If approved, the transaction was expected to close in the second half of 2026.<br>Four months later, Enova CEO Steve Cunningham told analysts: "I think there's a process you go through when you file a formal application with the regulators. We're going through that process now. It's pretty typical for anybody who's applying for a bank charter, or to become a bank holding company."<br>OppFi reached a $130 million deal in April to buy the holding company of the $1.1 billion-asset BNC National Bank in Bismarck, North Dakota. It said at the time that it expected the deal to close in the fourth quarter.<br>Under the Bank Holding Company Act, the Fed must take into consideration a company's managerial competence, its overall financial condition, and the convenience and needs of the communities that the bank plans to serve.<br>The state AGs say Enova plans to move the headquarters of Grasshopper Bank from New York, where it is subject to New York's usury limits, to Utah, where no such limit exists. Enova operates CashNet USA, which charges triple-digit annual percentage rates, and NetCredit, which charges APRs of up to 99.99%. The agreements to buy banks "are deliberate efforts to avoid state usury laws and to extract profit from those that are in desperate need of money," the state attorneys general said in their letter.<br>The AGs claim Enova and OppFi are trying to bypass state interest rate caps and sell loans with triple-digit interest rates to vulnerable, mostly subprime borrowers nationwide.<br>"Enova and OppFi's history of high-cost lending and flagrant efforts to evade applicable laws render such applications inconsistent with the standard for approval under the law and approving them would undermine the integrity of the national banking system," the state attorneys general wrote.<br>Separately, a coalition of consumer advocates led by the Center for Responsible Lending asked the Fed in April to hold hearings on the Enova-Grasshopper deal, and "to...