• Senators Elizabeth Warren and Chris Van Hollen want OppFi to abandon its acquisition of BNCCORP and BNC National Bank
• The lawmakers accuse OppFi of predatory lending and highlight APRs reaching 195%
• They allege OppFi's charge-off rate exceeds 55% and question its refinancing practices
• Their intervention follows Enova's withdrawal from its proposed Grasshopper Bank acquisition
• OppFi rejects the criticism and says becoming a bank would subject it to stronger federal oversight
• The dispute intensifies scrutiny of nonbanks seeking access to banking charters 

Two Democratic senators have called on nonbank lender OppFi to withdraw its proposed acquisition of BNCCORP and BNC National Bank, intensifying political scrutiny of fintech companies seeking access to national bank charters.

Sens. Chris Van Hollen of Maryland and Elizabeth Warren of Massachusetts urged OppFi to abandon the transaction in a letter sent Wednesday, alleging that its business model is "built on predatory lending practices."

The lawmakers highlighted personal installment loans carrying annual percentage rates of up to 195% and questioned whether a company operating such a lending model should be permitted to acquire a federally regulated bank.

OppFi has positioned itself as a provider of credit to consumers who may struggle to obtain financing from traditional banks. Van Hollen and Warren acknowledged that positioning but argued the company's practices tell a different story.

"OppFi - a nonbank lender that provides financial services to consumers through installment loans - brands itself as a lender that 'empower(s) everyday consumers to overcome financial hurdles and build long-term financial stability,'" the senators wrote. "But, a closer look into its business model reveals persistent, predatory financial strategies."

Their intervention follows Enova's recent decision to terminate its proposed acquisition of Grasshopper Bank. Enova CEO Steve Cunningham blamed the withdrawal on an absence of "clear standards for nonbanks that want to become banks," which he said had created scope for political pressure.

Van Hollen and Warren argued OppFi should now take the same course. They said both companies target consumers described as underserved by traditional banks, often because of their credit profiles.

"Paired with the mounting opposition it has received to date in regards to its application and Enova's appropriate decision to change course, we believe OppFi should withdraw its application to acquire a national bank, immediately," they wrote.

OppFi strongly rejected the senators' characterization of its business and defended the proposed transition into the regulated banking system.

"Politicizing and attacking OppFi's bank charter application does a disservice to consumers who need access to credit, hurting the very people the lawmakers claim to want to protect," an OppFi spokesperson said.

The spokesperson added that becoming a regulated bank would subject its business model to "rigorous federal oversight," reinforcing what the company described as its commitment to responsible lending.

The senators also alleged that OppFi has a charge-off rate exceeding 55% and cited a 2021 lawsuit filed by the District of Columbia attorney general. That case alleged OppFi's underwriting model anticipated that as many as one-third of borrowers would default.

Van Hollen and Warren further accused the lender of aggressively encouraging refinancing, potentially extending borrowers' debts and increasing their overall borrowing costs.

The dispute places OppFi's proposed acquisition within a wider debate over whether fintech and nonbank lenders should be allowed to obtain bank charters - and how regulators should assess the consumer protection implications when they do.