Right? And this is coming from a Dem administration - Illinois authorities should take action - the PLPA authorizes them to void the loan and even go as far as to suspend OppFi's license.
This reminds me of a Propublica article about a tribe allowing finance companies to operate from their land so they could use the sovereign status of the tribal land to charge interest rates that are illegal in most states. I understand OPPFI is working as a third party but I don't understand why or how that gives them ability to charge more than the banks they're partnering with would be allowed to charge without violating state laws? Obviously they ARE getting some consequences but the fact that they feel like it's a safe enough bet to keep it up and the partner banks go along with it is really demonstrative of the level of respect for the law and care for consumers they have.
Yes - very similar to tribal lending. OppFi and other fintechs use a "rent-a-bank" scheme to evade state interest rate caps. The theory they suggest is that the bank is chartered in a state with either very high or no interest rate caps and that state's laws should govern the loan. Since OppFi is only "facilitating" the loan, the "true lender" is one not governed by usury laws. However, the loan was made with a customer in Illinois (Or DC, or California) - and that state has authority to void the loan. Likewise, in many cases of tribal loans, courts have found customers are only liable for the interest rate allowed in their state - or, in some cases, that a loan made in that state at rates that exceed the state rate cap is null and void. Customers who are offered these loans should file complaints - and state authorities should void the loans and/or suspend the company's operations. OppFi is a consistently bad actor.
The typical libertarian response.. it is the consumers responsible to make sure the loan you’re taking out isn’t breaking state or federal law!
Right? And this is coming from a Dem administration - Illinois authorities should take action - the PLPA authorizes them to void the loan and even go as far as to suspend OppFi's license.
This reminds me of a Propublica article about a tribe allowing finance companies to operate from their land so they could use the sovereign status of the tribal land to charge interest rates that are illegal in most states. I understand OPPFI is working as a third party but I don't understand why or how that gives them ability to charge more than the banks they're partnering with would be allowed to charge without violating state laws? Obviously they ARE getting some consequences but the fact that they feel like it's a safe enough bet to keep it up and the partner banks go along with it is really demonstrative of the level of respect for the law and care for consumers they have.
https://www.propublica.org/article/wisconsin-lac-du-flambeau-tribe-predatory-lending-lawsuit-sovereign-immunity
Yes - very similar to tribal lending. OppFi and other fintechs use a "rent-a-bank" scheme to evade state interest rate caps. The theory they suggest is that the bank is chartered in a state with either very high or no interest rate caps and that state's laws should govern the loan. Since OppFi is only "facilitating" the loan, the "true lender" is one not governed by usury laws. However, the loan was made with a customer in Illinois (Or DC, or California) - and that state has authority to void the loan. Likewise, in many cases of tribal loans, courts have found customers are only liable for the interest rate allowed in their state - or, in some cases, that a loan made in that state at rates that exceed the state rate cap is null and void. Customers who are offered these loans should file complaints - and state authorities should void the loans and/or suspend the company's operations. OppFi is a consistently bad actor.