• OppFi withdraws applications to acquire Arizona-based BNC National Bank
• CEO Todd Schwartz insists the merger agreement remains valid
• Company criticizes unclear federal standards for fintech bank acquisitions
• Enova previously withdrew its proposed Grasshopper Bank acquisition
• Twenty attorneys general opposed both transactions over concerns about circumventing state lending restrictions
• OppFi disclosures show certain loans carrying interest rates as high as 195%
• Senators Elizabeth Warren and Chris Van Hollen urged OppFi to abandon the deal
• OppFi maintains its ambition to obtain a bank charter

Subprime lender OppFi has withdrawn its regulatory applications to acquire Arizona-based BNC National Bank, intensifying concerns that uncertainty surrounding federal approval standards is obstructing fintech companies seeking to enter the banking sector.

The Chicago-based company confirmed the withdrawal on Tuesday but insisted that its ambition to obtain a bank charter remains unchanged.

OppFi CEO Todd Schwartz emphasized that the proposed acquisition has not been terminated, despite the withdrawal of applications submitted to federal banking regulators.

"To clarify, the deal did not fall apart," Schwartz said in an email to American Banker. "Our merger agreement with BNCCORP [the bank's holding company] remains in effect."

The company said it had proactively engaged with federal regulators before announcing the transaction and subsequently responded to extensive information requests from the Office of the Comptroller of the Currency (OCC), Federal Reserve and Federal Deposit Insurance Corporation (FDIC).

However, Schwartz criticized what he described as uncertainty surrounding the standards used to assess applications involving fintech lenders and traditional banking institutions.

"We believe that our applications satisfied the existing statutory criteria for approval, but there is a lack of clearly articulated standards by which those criteria are being used to evaluate our applications and the proposed combination with BNC," he said.

Schwartz urged regulators to establish clearer requirements that would enable fintech platforms and community banks to combine their operations while serving consumers whose borrowing needs are not adequately addressed by traditional lenders.

The withdrawal follows a similar decision by Chicago-based Enova, which abandoned its proposed acquisition of digital lender Grasshopper Bank in September.

Enova CEO Steve Cunningham also criticized the absence of transparent regulatory standards governing nonbank lenders seeking banking charters.

"Without clearly articulated standards, the process is susceptible to political pressure and outside advocacy, rather than being guided strictly by the statutory factors that should govern it," Cunningham said.

Both proposed acquisitions attracted significant political opposition over concerns that fintech lenders could use nationally regulated banking structures to circumvent state restrictions on consumer lending rates.

In July, 20 state and district attorneys general urged federal regulators to reject the OppFi and Enova transactions, arguing that the acquisitions represented attempts "to avoid state usury laws."

The attorneys general highlighted existing arrangements through which fintech lenders partner with banks chartered in states without restrictive interest rate limits.

Such partnerships can enable lenders to offer loans carrying annual percentage rates substantially above the 36% ceiling imposed in some jurisdictions.

OppFi's own lending disclosures indicate that certain products can carry annual percentage rates reaching 195%, intensifying scrutiny of the company's business model and the potential implications of acquiring a regulated bank.

Political pressure continued after Enova withdrew its applications.

Approximately two weeks later, Democratic Senators Elizabeth Warren of Massachusetts and Chris Van Hollen of Maryland urged OppFi to abandon its proposed acquisition of BNC National Bank.

The developments expose growing tensions between fintech lenders seeking direct access to banking infrastructure and policymakers concerned about consumer protection and regulatory arbitrage.

Although OppFi maintains that its merger agreement remains valid, the withdrawal leaves the transaction's regulatory future uncertain and raises broader questions about the prospects for nonbank lenders pursuing acquisitions of federally regulated institutions.