Banking and Finance Law Daily Wrap Up, MERGERS AND ACQUISITIONS—Advocacy groups oppose Enova/Grasshopper Bank merger, (Feb 25, 2026)

By Jonathan Anderson

The organizations argued that the deal would harm consumers and threaten the stability of the financial system, and raised concerns about previous legal violations.

Several advocacy groups filed comment letters with the Office of the Comptroller of the Currency and the Federal Reserve Board urging the agencies to reject an application by Enova International, Inc., which owns CashNetUSA and NetCredit, to merge with Grasshopper Bank. The National Community Reinvestment Coalition (NCRC) and its member organization, the Woodstock Institute, raised concerns about the merger’s risks to consumers, small businesses, and the broader financial system. Meanwhile, the National Consumer Law Center (NCLC) noted Enova’s high-cost business model and the company’s history of legal violations.

NCRC, Woodstock Institute. In its comment letter, NCRC and the Woodstock Institute argued that the merger “would create unacceptable risks to low- and moderate-income (LMI) communities and small businesses, as well as to the financial system and its safety and soundness.” The letter also claimed that Enova engages in predatory lending, including payday and installment loans, with some interest rates ranging from 36 percent to 300 percent. Further, the groups argued that Enova has failed to comply with Consumer Financial Protection Bureau consent orders.

In addition, the advocacy groups argued that if the merger is allowed to proceed, the resulting bank will be a national bank that is not subject to most rate caps and disclosure laws because the bank headquarters will move to Utah, where there is no interest rate cap.

The letter further cited potential systemic risks to the national banking system and financial stability, noting that Enova would have access to federal deposit insurance, the Federal Reserve Discount Window, and exemptions to state laws.

NCLC. In its comment letter, NCLC raised four major problems with Enova. First, the letter cited Enova’s “high-cost business model.” NCLC noted that if the merger were approved, the resulting bank would be able to offer 100 percent to 300 percent APR loans across the country.

Second, NCLC argued that Enova engages in “risky, unsafe and unsound lending.” The letter asserted that Enova targets borrowers with bad credit and has high annualized charge-off rates. “High-cost lending with high charge-offs also results in a significant compliance risk of violating consumer protection and other laws,” the letter reads

Third, NCLC argued that Enova has a history of legal violations. The letter cited a 2019 civil penalty in which the CFPB required Enova to pay $3.2 million for debiting consumers’ bank accounts without authorization. The letter also cited a 2023 fine of $15 million against Enova for withdrawing funds from consumer accounts without consent (see Banking and Finance Law Daily, Nov. 15, 2023).

A consent order resolving the 2023 matter identified various issues with Enova’s conduct. The CFPB found that the company withdrew funds without consumers’ express consent, against the 2019 order; failed to provide consumers with copies of signed authorizations; and cancelled loan extensions it had granted to certain consumers. Moreover, the agency found that the company misrepresented the due date for certain transactions and failed to tell consumers who had been granted a loan extension that making an interim partial payment would result in cancellation of the extension.

Fourth, the NCLC said the OCC has historically kept national banks “out of predatory 100% APR loans” and it should not change that. “Enova’s lending programs do not meet the laws and standards expected of national banks and the OCC should therefore deny its application,” the letter reads.

Companies: CashNetUSA; Enova International, Inc.; Grasshopper Bank; National Community Reinvestment Coalition; National Consumer Law Center; NetCredit; Woodstock Institute

RegulatoryActivity: BankingOperations CFPB ConsumerCredit EnforcementActions InterestUsury Loans MergersAcquisitions UDAAP UtahNews