OppFi (NYSE: OPFI)which provides technology to banks to offer installment loans, filed a lawsuit against the Department of Commissioner of Protection and Financial Innovation.
The company is seeking a ruling that the state’s interest rate cap law does not apply to loans originated by OppFi’s banking partners (OPFI) and serviced through the OppFi technology platform.
Its partners are not subject to California interest rate laws because the loans are made by a state-chartered, federally insured bank, OppFi (OPFI) said in a statement. The California commissioner of the DFPI has threatened to enforce interest rate laws against the company, he said.
“Loans made through the OppFi Platform (OPFI) are constitutionally and legally exempt from California interest rate ceilings because the loans are made by FinWise Bank, Member FDIC, a state-chartered bank located in Utah” the company said. “It is a well-established federal law that allows state-chartered banks to export the interest rates allowed in their chartered state to any other state in the country.”
OppFi (OPFI) shares are slippage 0.3% in trading after hours.
Last month, OppFi (OPFI) named Todd Schwartz as CEO and updated guidance for the full year.