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