Rent-a-Banks and High Cost Lending

California has capped interest rates at around 37% per year on some consumer loans; despite this companies are able to offer high interest loans with OppLoans charging 160% on a typical loan in California according to the Wall Street Journal; the higher rate is made possible due to their bank partnership with a Utah bank called FinWise; this is now source of contention for state regulators and consumer advocates; some regulators believe that companies such as OppLoans are intentionally finding ways to evade state law; according to OppLoans, the company “is not intentionally evading or breaking state law.” OppLoans “provides outsourced services to…banks to help them provide loans to credit-challenged Americans.” The Wall Street Journal digs further into this issue and the companies that currently operate under a similar framework. The Wall Street Journal

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