Will Trump Administration Approve CashNetUSA's Predatory Bank?
Giving payday predator a national charter could allow triple digit interest rates
Consumer advocates are raising the alarm about a payday predator’s attempt to gain legitimacy by way of acquiring a national bank.
Enova International, the company that owns CashNetUSA and NetCredit, wants to acquire Grasshopper Bank and assume its national bank status.
As the National Consumer Law Center (NCLC) points out, this could have devastating consequences:
If Enova were allowed to become a national bank, it would be able to offer its 100% to 300% APR loans across the country, ignoring state laws nationwide.
“During an affordability crisis, when President Trump has supported a 10% cap on credit card rates, his Administration must reject a new national bank that charges 100% to 300%,” said Lauren Saunders, associate director of the National Consumer Law Center. “It would be unprecedented for the Trump Administration to sanction a 100% APR bank.”
Through its CashNetUSA and NetCredit brands, Enova makes installment loans and lines of credit at rates that reach 100% to 300% APR. It has an astoundingly high charge-off rate over 50%, revealing a predatory and highly deceptive business model that traps people in unaffordable loans. If Enova is allowed to acquire Grasshopper Bank and become a national bank based in Utah, federal law would allow Enova to charge these high rates, without any limit, anywhere in the country. Currently, 45 states prohibit those rates on many installment loans.
While President Trump has posted on social media about capping credit card interest rates, his Administration continues to undermine consumer protections in the financial services industry.
