High-Cost Rent-a-Bank Loan Watch List (2024)

September 26, 2024 — Issue Brief

High-Cost Rent-a-Bank Loan Watch List (1)

Interest rate limits are the simplest andmost effectiveprotection against predatory lending. Since the time of theAmerican Revolution, states have limited interest rates to protect their residents.American votersstrongly support interest rate caps. At least45 statesand the District of Columbia (DC) cap rates on at least some installment loans.

But high-cost lenders are increasingly usingrent-a-bank schemeswith a small number of rogue banks, which are not subject to state interest rate limits, to evade state rate caps on installment loans and lines of credit. Several high-cost consumer lenders – American First Finance, CNG Holdings, EasyPay, Elevate, Enova, LoanMart, OppLoans, Personify Financial, and Total Loan Services (through EZ$Money Check Cashing, LoanMe, Lendly LLC, MoneyKey, Quickcredit.com, and SunUp Financial) – are laundering loans through five FDIC-supervised banks: Capital Community Bank, FinWise Bank, First Electronic Bank, and TAB Bank of Utah, and Republic Bank & Trust of Kentucky.

Rent-a-bank schemes are ofquestionable legality. Lenders pick and choose where they lend, generally avoiding states that vigorously enforce their laws.

See below to learn about the banks and lenders teaming up to issue triple-digit interest, debt-trap loans in states that do not allow high-cost loans — and which states they avoid.

FIND YOUR STATEinthis spreadsheetto see how many “rent-a-bank” lenders are attempting to avoid rate caps in your state.

High-Cost Rent-a-Bank Loan Watch List (2)

OppLoans(aka OppFi) uses FDIC-supervisedFinWise Bank(Utah), Capital Community Bank (CC Bank) (Utah), and First Electronic Bank, a Utah industrial bank, to make installment loans of $500 to $4,000 at160% APRin a number of statesthat do not allow that rate for some or all loans in that size range. OppLoans also lends directly in several states. OppLoans has beensuedby the District of Columbia Attorney General for engaging in a rent-a-bank scheme andagreedto pay $2 million and stop evading DC’s usury laws.

  • Sample OppLoans/FinWise Bank loan:A $3,000 loan at 160% APR for 12 Months. 12 Payments of $514.60 each for a total of$6,175.20.
High-Cost Rent-a-Bank Loan Watch List (3)
High-Cost Rent-a-Bank Loan Watch List (4)

Duvera Billing Services dbaEasyPay Financeoffers high-cost credit throughbusinesses across the countrythat sellauto repairs, furniture, home appliances, pets, wheels, and tires, among other items – includingpredatory puppy loans. EasyPay’s website does not disclose its rates, but examples from consumers in some states include $1,500 loans at188.99% APR. EasyPay extends credit through FDIC-supervised Transportation Alliance Bank dbaTAB Bank(Utah) in several states,that may not allow that rate. EasyPay’s website states that it administers financing directly in other states, most likely under state lending or retail installment sales laws.

EasyPay Finance has settled enforcement actions brought by Colorado and the District of Columbia for making unlawful loans, and Transportation Alliance Bank was forced by Iowa to stop facilitating EasyPay loans.

See Also
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Note: The map at the top of this page on How Many Rent-a-Bank Lenders Operate in Your State does not include states where EasyPay operates directly.

High-Cost Rent-a-Bank Loan Watch List (5)

Elevate’sRiseuses FDIC-supervisedFinWiseBank(Utah)and Capital Community Bank (Utah) to make installment loans of $500 to $5,000 withAPRs of 99% to 149%inseveral statesthat do not allow those rates for some or all loans in that size range. Rise also lends directly in a number of other states. In addition to the Rise installment loan, Elevate also offers a line of credit, Elastic, using FDIC-supervised Republic Bank & Trust (Kentucky), at an effective APR of about 100% in a number of states that do not allow that rate.Elevate wassuedby the DC Attorney General for engaging in a rent-a-bank scheme and agreed to a nearly$4 million settlementand to stop usurious lending in DC.

High-Cost Rent-a-Bank Loan Watch List (6)

Enova, which operates the payday and installment lender CashNetUSA, uses the NetCredit brand through FDIC-supervised Republic Bank & Trust (Kentucky) and Transportation Alliance Bank (TAB Bank) (Utah) to make installment loans of $2,500 to $10,000 with APRs up to 99.99% in several states that do not allow those rates on some or all loans in that size range. Enova also offers rent-a-bank lines of credit at rates that states do not allow.

High-Cost Rent-a-Bank Loan Watch List (7)

Applied Data Finance, doing business asPersonify FinancialusesFirst Electronic Bank,an FDIC-supervised industrial bank chartered inUtah (and owned by Fry’s Electronics), to enable installment loans of $500 to $10,000 withAPRs as high as 179.99%in several states that do not allow that rate for some or all loans in that size range. Personify also lends directly in a number of states.

High-Cost Rent-a-Bank Loan Watch List (8)

Wheels Financial Group, LLC dba LoanMart(under the ChoiceCash brand) uses FDIC-supervisedCommunity Capital Bank(Utah) to make auto-title loans in several states,most of which restrict or disallow high-cost auto title lending. Asample loan formerly on LoanMart’s website wasa 3-year, $3,000 loan at170% APRwith 36 monthly payments totaling $15,431.04. LoanMart also makes auto-title loans directly in a number of states. LoanMart does not operate in other states.

High-Cost Rent-a-Bank Loan Watch List (9)

CNG Holdings, formerly Axcess Financial, the parent company of payday lender Check ‘n Go, offers the Xact installment loan through FDIC-supervised Capital Community Bank. The loans range from $1,000 to $5,000. Rates range from145% APR to 225% APR. Xact loans are offered in several states that do not allow installment loans at those rates. CNG Holdings also directly offers high-cost installment loans in several other states.

Other Consumer Rent-a-BankLenders

CC Bank facilitates rent-a-bank installment loans up to 225% APR through a variety of payday and online lenders, including Balance Credit, Lendly, MoneyKey, Quickcredit, and Simple Fast Loans.

American First Financeoffers installment loans throughFinWise Bankat rates up to155% APRfor purchases at retailers selling furniture, appliances, home improvements, pets, veterinarian services, auto and mobile home repair, jewelry, and body art. American First Finance also directly offers retail installment contracts and lease-to-own in some states. Consumer complaints describing the predatory American First Finance loans facilitating by FinWise Bank are detailed in comments to the FDIC.

Integra Credit offers $500 to $3,000 at 149% to 199% APR through TAB Bank in several states that do not allow that rate.

See all resources related to: High-Cost Credit

High-Cost Rent-a-Bank Loan Watch List (2024)
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