Fintech Oportun has acquired neobanking platform Digit, which provides automated savings, investing and banking tools, the companies announced Wednesday (Dec. 22).
Oportun works in low- to moderate-income lending. By buying Digit, Oportun will boost its artificial intelligence (AI) and digital capabilities to further help its customers meet financial needs.
The acquisition went through for $211.1 million, which included an aggregate of around $112.6 million in cash and $98.5 million in common stock.
Digit, founded in 2013, gives members access to personalized savings, investing and banking tools, and users can both keep and integrate bank accounts into the platform. They can also open new accounts through Digit’s bank partner.
Digit is enabled through AI and sets funds aside automatically for members by analyzing cash flow and recognizing how much is able to be set aside and invested. It also works to stay within a member’s immediate financial means.
Digit will reportedly run as a business unit within Oportun, and will be led still by Ethan Bloch, Digit founder and CEO.
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Oportun has also recently done away with its application for a bank charter, PYMNTS writes.
See also: Latino-Focused Lender Oportun Scraps Bank Charter After CFPB Probe
The withdrawal was at Oportun’s own discretion, and came because the Consumer Financial Protection Bureau (CFPB) had been looking into claims that Oportun had violated consumer protection laws through its collection practices — in particular, the ones focused on hardship treatments from the pandemic.
The report says almost two-dozen consumer advocacy groups had written a request to wait until the CFPB was done with its probe for the company to go forward with a charter.
Oportun said it had a “constructive relationship” with the Office of the Comptroller of the Currency (OCC) and would be pursuing a charter in the future, with amended elements “to reflect changes to our business.”
Oportun has faced controversy in 2020, with reports saying the company had been suing thousands of low-income Latinos to collect debts from the early days of the pandemic.
The company responded by saying it would be dropping the debt claims, suspending new filings and capping its interest rate at 36%.
