OppFi Enova bank deals face scrutiny over state rate caps

OppFi Enova bank deals worth a combined $499 million when announced have put state interest-rate limits at the center of two financial technology acquisitions. A coalition of 20 state attorneys general has asked the Federal Reserve, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp. to deny banking privileges to companies it says use bank partnerships to avoid state rate caps.

The letter names OppFi’s approximately $130 million acquisition of BNCCORP and BNC National Bank, as well as Enova International’s proposed acquisition of Grasshopper Bancorp and Grasshopper Bank. The attorneys general argue that the transactions could extend business models they associate with high-cost installment lending. Their claims are allegations before federal regulators, not regulatory findings.

Why are OppFi and Enova bank deals under scrutiny?

The dispute turns on how bank charters affect lending across state lines. State-chartered or nationally regulated banks can, in some circumstances, lend under the rate rules of their home state, while nonbank lenders often face the caps set by each borrower’s state.

According to the attorneys general, 45 states and Washington, D.C., cap interest rates on small to midsize installment loans, and 36% is widely accepted as the maximum for very small loans. The coalition says OppFi and Enova partner with banks chartered mainly in states without rate caps and offer loans with rates reaching 195% and higher.

The attorneys general also told regulators that high rates can let lenders recover principal and earn returns even when many borrowers fail to repay. Their letter cites Enova charge-off rates above 50% and says that credit performance should raise safety-and-soundness concerns as regulators assess the acquisitions.

What the buyers say the bank acquisitions would add

OppFi has said in SEC-filed materials that BNC had about $1 billion of deposits at the end of 2025 at a cost below 2%. The company projects at least $60 million of synergies in the first year after closing, more than $90 million in the second year and more than $115 million in the third year.

OppFi links those expected benefits to “geographic expansion” and “funding optimization,” according to its filings. The company expects adjusted earnings-per-share accretion of more than 25% in 2027 and 40% in 2028, and says BNC would expand its ability to offer financial products in more states while lowering and diversifying funding costs.

Enova’s SEC-filed materials project annual revenue synergies of $175 million to $230 million within the first two years after closing. The company says those gains would come from broader lending products, access to new markets and a simpler operating structure under a unified federal regulatory framework.

Funding is also central to Enova’s transaction case. Grasshopper has about $3 billion of deposits through direct and banking-as-a-service operations, both on and off balance sheet. Enova says Grasshopper’s deposit costs are 300 to 400 basis points lower than the cost of Enova’s securitizations, and projects $50 million to $100 million of annual funding synergies within the first two years.

Including revenue gains and incremental expenses, Enova projects net synergies that would lift adjusted net income by $125 million to $220 million annually within the first two years. It expects adjusted EPS accretion above 15% in the first full year and above 25% once synergies are fully realized.

Regulatory approval could affect deal economics

The regulatory question extends beyond whether the deals close. Enova says in SEC filings that required approvals could include conditions that reduce expected merger benefits. Completion depends on obtaining approvals without a “burdensome condition,” and Enova warns that restrictions could limit revenue or otherwise reduce the anticipated gains.

There is no evidence that federal regulators have decided to impose conditions on either transaction. The attorneys general’s challenge, however, targets two benefits highlighted in the companies’ own materials: cheaper deposit funding and the ability to offer products across more states.

This story draws on original reporting from PYMNTS.