Accountable.US, Americans for Financial Reform, Center for Responsible Lending, Consumer Action, Consumer Federation of America, National Consumer Law Center (on behalf of its low-income clients), National Community Reinvestment Coalition, Public Citizen, US PIRG and the Woodstock Institute submitted comments in connection with the Community Reinvestment Act (CRA) examination of FinWise Bank. FinWise Bank helps several nonbank lenders make predatory loans at rates up to 160% annual percentage rate (APR) that they cannot legally make directly. The loans that FinWise facilitates are not only usurious; they also pose a host of other consumer protection problems and potential legal violations.
The comments focus on three of FinWise Bank’s partners: American First Finance, Elevate Credit, Inc. (making installment loans through its brand Rise Credit), and Opportunity Financial (“OppFi”). These FinWise partners make loans with rampant problems, including unaffordable APRs, high default rates, debt collection abuses, credit reporting errors, and loans made as a result of identity theft.
The problems with the loans made by one of FinWise Bank’s partners, American First Finance (“AFF”), appear to be even more severe than those posed by the EasyPay Finance loans facilitated by another FDIC-supervised bank, Transportation Alliance Bank (“TAB Bank”), which received a downgrade of its CRA rating. AFF has a similar business model to EasyPay Finance, lending through brick-and-mortar retailers and with numerous complaints about deception as to the interest rates and no-interest payment period. AFF has more than twice as many Better Business Bureau complaints against it in recent years as EasyPay. The loans made by FinWise Bank partner Elevate Credit under its Rise brand, as well, have twice as many CFPB complaints as EasyPay.
An analysis of consumer complaints about loans by American First Finance, Rise and OppFi raises serious concerns about extensive consumer harm and potential violations of federal and state consumer protection statutes.
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