Loan Shark Seeks to Become a Bank – 100% to 300% APR Loans Coming to a State Near You?

Enova International owns two major lending brands: CashNetUSA and NetCredit. The company offers installment loans and lines of credit .

The Problem

Enova is seeking approval from the Office of the Comptroller of the Currency (OCC) to become a national bank. If approved, Enova would acquire Grasshopper Bank and operate as a national bank based in Utah .

Why Is This Dangerous?

Here is the critical issue: Currently, 45 states prohibit the interest rates Enova charges on many installment loans. State laws cap interest to protect consumers. But if Enova becomes a national bank, federal law would allow it to charge these high rates anywhere in the country – regardless of state caps .

What Rates Does Enova Charge?

Enova's loans have interest rates that reach 100% to 300% APR .

To put that in perspective:

• A 100% APR loan means you pay back double what you borrowed in one year
• A 300% APR loan means you pay back four times what you borrowed

The Industry's Dirty Secret

Enova has an "astoundingly high charge-off rate over 50%" – meaning more than half of its loans are not repaid. This is not because borrowers are irresponsible. It is because the rates are so high that people cannot possibly keep up .

The National Consumer Law Center (NCLC) has urged the OCC to deny Enova's application, calling it a "predatory and highly deceptive business model that traps people in unaffordable loans" .

The Timing

Consumer advocates have pointed out that this application comes at a time when President Trump has supported a 10% cap on credit card rates. Allowing a 100% to 300% APR bank would directly contradict that position .