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Digital finance platform OppFi has withdrawn its applications to acquire BNC National Bank and its parent company, BNCCORP, saying it did not receive a “meaningful opportunity” to engage with federal regulators over concerns surrounding the proposed transaction.
OppFi, which partners with banks to provide loans to underserved customers, agreed in April to acquire BNC National Bank. The deal would have marked a significant step in the company’s efforts to expand its presence in the US banking sector.
However, OppFi has now withdrawn its applications from the Office of the Comptroller of the Currency (OCC), the Federal Reserve and the Federal Deposit Insurance Corporation (FDIC), bringing the proposed acquisition to an end.
OppFi cites lack of clarity in regulatory review
In explaining its decision, OppFi said it had proactively engaged with the relevant regulators but argued that restrictions on communication during the application process, combined with a lack of clearly defined assessment standards, limited its ability to address potential concerns.
The company stated that it had not been given a meaningful opportunity to engage with federal regulators on the issues that could affect the outcome of its applications.
OppFi did not specify the concerns raised during the review process or identify particular regulatory requirements it believed had not been clearly communicated.
The withdrawal highlights the challenges financial technology companies can face when seeking to enter the regulated banking sector, where acquisition approvals involve multiple federal agencies and scrutiny of business models, lending practices and regulatory compliance.
US senators raise objections over lending practices
The proposed acquisition had faced opposition from US senators Elizabeth Warren and Chris Van Hollen, who wrote to OppFi in September expressing concerns about the transaction and citing what they described as “predatory lending practices”.
Their intervention added to the scrutiny surrounding the deal. However, OppFi did not explicitly identify the senators’ objections as the reason for withdrawing its applications.
The episode underscores the potential intersection between regulatory review, consumer protection concerns and political scrutiny when financial services companies seek to expand through bank acquisitions.
Enova’s abandoned acquisition raises similar questions
OppFi’s decision follows a similar development involving online lending company Enova, which withdrew its application to acquire digital business bank Grasshopper in September after facing opposition from Warren and Van Hollen.
At the time, Enova chief executive Steve Cunningham criticised the lack of clearly articulated regulatory standards, arguing that the process could become vulnerable to political pressure and external advocacy rather than being guided strictly by statutory requirements.
The parallel cases have drawn attention to the regulatory uncertainty that lenders may encounter when pursuing bank acquisitions, particularly where their lending models attract consumer protection concerns.
Implications for fintech-led bank acquisitions
The withdrawal of the BNC National Bank deal leaves OppFi without the proposed acquisition as a route to expanding its banking operations. It also illustrates the importance of regulatory clarity and effective engagement between applicants and supervisory agencies during complex approval processes.
For fintech companies pursuing bank ownership, regulatory approval remains a critical step in determining whether expansion plans can proceed. The OppFi case also highlights how questions surrounding lending practices and consumer protection can become central to the scrutiny of transactions involving digital finance providers.
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