On March 7, 2022, Opportunity Financial, LLC (“OppFi”) sued Clothilde Hewlett in her official capacity as Commissioner of the California Department of Financial Protection and Innovation (“DFPI”) seeking declaratory judgement and injunctive relief for threatened enforcement of California’s Fair Access to Credit Act (“AB 539”). Complaint, Opportunity Financial, LLC, v. Hewlett, No. 22STCV08163 (Cal. Super. Ct., March 7, 2022). AB 539 became effective on January 1, 2020, amending the California Financing Law (“CFL”) and imposing an interest rate cap of 36% for covered loans between $2,500 and $10,000 made by “finance lenders” subject to the CFL.
The complaint alleges that the Enforcement Division of the DFPI indicated to OppFi that the loan program, a partnership with FinWise Bank, was in violation of the CFL because OppFi was the “true
lender” and was charging interest rates in excess of those permitted under the CFL. OppFi further alleges in its complaint that the DFPI has threatened to and is using AB 539 as a weapon to wage war against OppFi and other FinTechs operating similar bank partnership programs. Read More