FinTech lender OppFi has decided not to continue pursuing plans to become a national bank.
About OppFi’s BNC Acquisition Update:
Today, OppFi announced that it is pulling the plug on its plans to acquire BNCCORP, Inc. and its wholly owned subsidiary, BNC National Bank. The transaction would have created OppFi Bank. NA.
According to the company, although it “proactively engaged” with regulators before pursuing the BNCC transaction, it states that it has not had the ability to communicate effectively with regulators since or address concerns. In turn, it has now withdrawn applications with the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation.
OppFi first announced plans to acquire BNCCORP, Inc. in April of this year. The deal, valued at approximately $130 million, was to include a mix of cash and stock. Specifically, had the deal gone through, $BNCC shareholders would have received $19.375 per share in cash as well as 1.90 shares of OppFi Class A common stock for each BNCC share owned. At the time that the agreement was announced, the transaction was expected to close during the fourth quarter of this year.
What They’re Saying:
Discussing the decision, OppFi’s CEO and Executive Chairman Todd Schwartz said, “We believe that our applications satisfied the existing statutory criteria for approval, but there is a lack of clearly articulated standards by which those criteria are being used to evaluate our applications and the proposed combination with BNC. We encourage federal regulators to expeditiously articulate clear standards that will allow innovative community banks and financial technology platforms to combine to better serve the tens of millions of Americans whose needs are not being met by traditional banks.”
Elsewhere, watchdogs who opposed the acquisition celebrated the news. In a press release, Americans for Financial Reform Education Fund’s associate director of consumer policy Tom Feltner said, “A bank charter comes with the responsibility to serve the public safely and fairly, not abuse the privilege to push triple-digit interest loans into communities in every state. OppFi may have withdrawn this latest attempt, but other companies are continuing the push to abuse the banking system for everything from buy-now-pay-later to novel crypto charters. Federal regulators must stand up for people and communities rather than rubber-stamp special privileges for tech companies looking to play by their own rules.”
My Thoughts:
OppFi is/was one of several FinTechs currently pursuing national bank licenses, either by acquiring an existing bank or applying for a charter. That’s why it’s notable that things turned out as they did in this case. At the same time, this apparent failure shouldn’t necissarily be looked at as a bad sign for others since each company and situation is different.
It does seem that, following this move, OppFi will have more eyes on it than before — for better or worse. So, we’ll need to see what that means in terms of regulatory scrutiny and discussion.
