OppFi's Bank Bid Could Gut RI's New 36% Interest Rate Cap

There are a lot of ways a consumer protection dies. It can be repealed. It can be watered down in committee. It can be starved of enforcement money. Or — the quietest option — it can simply be rendered irrelevant by a federal regulator in Washington who approves a bank merger nobody in Rhode Island was told about.

That last one is what's on the table right now, and it involves a law Rhode Islanders spent almost fifteen years fighting for.

Here's the shape of the argument. Rhode Island's new 36% cap on payday loan interest takes effect January 1, 2027. A Chicago lender called OppFi, which currently charges Rhode Islanders 160% APR, is trying to buy a national bank before that date. If federal regulators say yes, a legal doctrine called rate exportation would let OppFi keep charging those rates here — and the cap, five months from now, would land on a company that no longer has to follow it.

On July 31st, the National Consumer Law Center and 122 other consumer, civil rights, legal services and community organizations filed comments with the Office of the Comptroller of the Currency, the Federal Reserve and the FDIC urging all three to deny OppFi's application to charter a national bank and acquire BNC Bank. Two weeks earlier, on July 17th, Rhode Island Attorney General Peter Neronha joined 19 other attorneys general — a coalition led by Illinois' Kwame Raoul — in a letter warning regulators that letting nonbank lenders buy banks would let them bypass state usury laws and push triple-digit loans nationwide.

So what is rate exportation? It's simple, and it's settled law. Under the National Bank Act, and after the Supreme Court's 1978 decision in Marquette National Bank v. First of Omaha, a national bank can charge borrowers anywhere in the country the interest rate allowed by the bank's home state. Not the borrower's state. The bank's. A national charter, in other words, comes with the power to lend under federal law instead of Rhode Island law.

OppFi's loans show in miniature how the business works. The company announced in April a roughly $130 million deal for BNCCORP and BNC National Bank, with closing expected in the fourth quarter of 2026 — subject to shareholder and regulatory approval. Its OppLoans product runs as high as 195% APR nationally. In Rhode Island, its own posted rates and terms list 160% APR on loans of $500 to $4,000 over nine to eighteen months. The company's latest 10-K discloses a net charge-off rate of 51.4% of average receivables. More than half.

And the profits don't come from repayment. According to the lawsuit the District of Columbia filed against OppFi in 2021, 75% of the company's pre-tax income from OppLoans customers came from refinancing — borrowers rolling one unaffordable loan into the next. That case ended in a settlement announced in November 2021: $1.5 million in refunds to more than 4,000 D.C. borrowers, over $640,000 in waived interest, and $250,000 to the District. Between 2018 and May 2020, D.C.'s attorney general said, OppFi had been lending to most District residents at 160% APR, more than seven times the city's 24% cap. OppFi denied wrongdoing.

Today OppFi operates lawfully in Rhode Island, through partner banks chartered in Utah, where there's no rate ceiling. It is one of five such lenders — along with EasyPay, Enova's NetCredit, LoanMart, and Check 'n Go's Xact — that the National Consumer Law Center identifies as making triple-digit-APR loans to Rhode Islanders. What the charter would do is remove the legal exposure that comes with borrowing someone else's bank.

The company frames this as an upgrade. CEO Todd Schwartz said the acquisition "simplifies and strengthens our compliance and risk management," and an OppFi spokesperson told Banking Dive the deal would "pair our proven product with extensive federal oversight." One could accept that at face value. But federal supervision and a state interest-rate cap are different things: a nationally chartered bank under close federal watch can still export its home-state rate into Rhode Island all day long.

The scale is worth holding onto. A $2,000 loan at 100% APR is illegal in 45 states. Rhode Island is one of them as of January. Center for Responsible Lending research found the typical payday APR here had been 261%, and that in 2022 Rhode Islanders paid an estimated $2.8 million in interest and fees on $28.2 million borrowed across 80,650 loans.

Rhode Island's senators are pushing back at the statute level. Sheldon Whitehouse and Jack Reed, with Elizabeth Warren and Jeff Merkley, introduced the Empowering States' Rights to Protect Consumers Act to restore states' authority over consumer loan rates. Reed's separate Predatory Lending Elimination Act would apply the Military Lending Act's 36% cap to everyone.

Neither has passed. Meanwhile the regulatory clock is the one that matters: OppFi's written answers to the Federal Reserve's questions were due August 8th, and the deal is slated to close in the fourth quarter — before the cap Rhode Islanders waited fifteen years for ever takes effect.