WASHINGTON—Sens. Elizabeth Warren (D-MA) and Chris Van Hollen (D-MD) are urging the Federal Reserve and OCC to reject Enova International’s bid to acquire Grasshopper Bank, warning the deal would allow what they called a “predatory lender” to operate nationwide under a national bank charter.
In a letter cited by Senate Banking Committee Democrats, the lawmakers said approval would give a lender offering loans around 100% APR “the green light” to expand more broadly, while potentially bypassing state interest-rate caps. Law360 reported the senators asked regulators to block the application.
Enova announced in December it had agreed to acquire Grasshopper Bancorp and Grasshopper Bank N.A. in a cash-and-stock deal valued at approximately $369 million, subject to approval by the OCC, Federal Reserve and other regulators. Enova’s Fed application says the company seeks to become a bank holding company and acquire Grasshopper, whose resulting bank would have its main office in South Jordan, Utah.
The senators’ objections follow earlier opposition from consumer and civil rights groups, including the Center for Responsible Lending and National Consumer Law Center, which argued the Fed should deny the application, hold a public hearing and scrutinize Enova’s underwriting, charge-offs, marketing and collection practices. Enova has said the transaction would combine its online lending and analytics platform with Grasshopper’s digital bank to serve underserved consumers and small businesses.