FinTech OppFi Inc. on Monday (March 7) filed a complaint in Los Angeles Superior Court against California’s Commissioner of the Department of Financial Protection and Innovation (DFPI), in relation to the state’s interest rate caps on loans.
OppFi wants a ruling that declares that the caps, which are part of California state law, inapplicable to loans originated by OppFi’s bank partners and serviced through the OppFi technology platform, the company announcement on Tuesday (March 8) said.
“Last year, a federal judge in the Northern District of California confirmed that loans made by OppFi’s bank partners are not subject to California’s interest rate laws because those loans are made by a federally insured, state-chartered bank,” OppFi said in its statement.
“In addition, California recently lost its lawsuit against the FDIC where the Court ruled that the challenged FDIC regulation, which confirmed that the interest charged by state-chartered banks remains permissible after any sale or assignment, was validly issued,” the company added.
OppFi’s statement said the Commissioner of the DFPI “has threatened to wrongly enforce those interest rate laws against OppFi,” arguing that “it is well-settled federal law that permits state-chartered banks to export the interest rates allowed in their chartering state to any other state in the country.”
Last month, OppFi’s board of directors named founder Todd Schwartz as chief executive officer, replacing Neville Crawley in that role.
Crawley, who became CEO on Dec. 31, also stepped down as OppFi director. Schwartz will continue to serve as the chairman of the board in addition to his duties as CEO.