Frequently Asked Questions (FAQs)
The Vital Role Played by Operators like OppFi to Fill Gaps in the Financial Landscape and Ensure Banking Access for All Americans
July 2026
This FAQ compiles publicly available research, government data, and OppFi’s own reported metrics to answer common questions about the economics of small-dollar lending, the effects of state interest rate caps, and OppFi’s pending application to become a bank holding company through its proposed acquisition of BNC National Bank.
What is OppFi, and what is its mission?
OppFi is a tech-enabled digital finance platform that partners with banks to offer financial products and services to everyday Americans. Established in 2012 by CEO and Founder Todd Schwartz, OppFi has facilitated over 9 billion dollars in credit to over 1.7 million customers. OppFi's mission is to facilitate safe, simple, and more affordable credit access to the 48 million Americans who currently lack traditional options while rebuilding their financial health.
The Economics of Small-Dollar Credit
Why do small-dollar loans carry higher APRs than larger, longer-term loans?
The fixed costs of underwriting, originating, servicing, and collecting a loan do not scale down with the size of the loan. Federal Reserve Board research (Chen and Elliehausen, 2020) finds that when these largely fixed costs are spread over a small principal balance, the resulting annual percentage rate rises accordingly. The study estimates a break-even APR of approximately 103.5% for a $594 installment loan — the rate required to cover underwriting, compliance, servicing, and expected credit losses, with no profit margin built in. This is due to the low dollar amount and the short term of the loan. JPMorgan Chase CEO Jamie Dimon has made the same point about the broader banking industry, stating it is “impossible to do loans like that and make a profit” if rates are capped at 36%.
Is APR an appropriate way to measure the cost of a short-term, small-dollar loan?
The Truth in Lending Act’s APR disclosure was built primarily around loans repaid over a year or more, such as mortgages and auto loans. Federal Reserve Board economists Thomas Durkin and Gregory Elliehausen observed in a 2013 paper that while TILA’s uniform APR disclosure clarified costs for complex, long-duration credit, it has “complicated disclosures” for simple, short-term products. The Consumer Financial Protection Bureau’s own 2021 Taskforce on Federal Consumer Financial Law reached a similar conclusion, noting that a lower APR is not automatically the better deal once duration and total dollar cost are taken into account.
What happens to credit access when a state imposes an interest rate cap on small-dollar loans?
Illinois offers a recent, measured example. When the state imposed a 36% all-in APR cap in March 2021, researchers found that loans to subprime borrowers in Illinois fell 44% within a year of the cap taking effect, while the average loan size to remaining subprime borrowers rose 40% (Bolen, Elliehausen & Miller, 2022). This reduction in credit access produces a clear negative impact on financial health outcomes: in a survey of affected borrowers, 39% reported that their financial well-being had declined since the cap, versus 11% who reported improvement, and 79% said they would like the option to return to their previous lender.
Do banks and credit unions currently serve this segment of borrowers?
Rarely. Banks and credit unions have largely exited small-dollar lending because the fixed costs of underwriting and servicing a small loan make it unprofitable at the rates most proposals contemplate (Servon, 2017). The Federal Reserve Bank of New York study cited above found that when the riskiest borrowers lost access to small-dollar credit under a rate cap, they did not shift to banks or credit unions — even though those institutions were explicitly exempt from the caps. In fact, 40% of OppFi’s own customers hold a checking or savings account at a large national bank or a credit union — institutions that already hold their deposits — and still seek installment credit elsewhere.
If small-dollar lending isn’t available through a regulated channel due to rate caps, does the underlying need for credit disappear?
No. An estimated 48 million Americans live in underbanked households and periodically need credit outside conventional bank underwriting models (FDIC, 2023 National Survey of Unbanked and Underbanked Households). When regulated lenders exit a market because a rate cap makes the product unprofitable to offer, that demand does not go away — it shifts to less-regulated or unregulated alternatives, including payday lenders, tribal lenders, and offshore online lenders operating with less examination, less transparency, and fewer consumer protections than a chartered, supervised bank.
OppFi’s Product and Consumer Protections
How does OppFi make sure a customer isn’t paying more than necessary?
OppFi’s TurnUp program checks eligible applicants who opt in against several near-prime lending partners before or during the application process, and directs applicants to a lower-rate offer if one exists. In 2025, TurnUp matched 14.5% of total eligible applicants with a potential partner offer, but just 1.2% of eligible applicants ultimately qualified after applying and accepted a lower-rate loan through the program (OppFi 2025 Social Impact Report). The remaining 98.8% did not have a lower-cost option available to them within that partner network, demonstrating the need for loans facilitated by OppFi.
What does an OppFi loan cost beyond interest?
OppFi never charges any application fees, origination fees, late fees, NSF fees, or prepayment penalties. Loans facilitated by OppFi are transparent, amortizing, and with no balloon payments.
What happens if a borrower experiences hardship and can’t make a payment?
OppFi offers one-time payment deferments, income-loss hardship plans, and disaster-assistance programs intended to keep a borrower in good standing rather than triggering default or collections. For example, in 2025, over 26,000 customers enrolled in a hardship program, and 55% of them have repaid their loans.
Does refinancing trap a customer in a cycle of debt?
No, in fact, refinancing is responsible and enables borrowers to lower costs and manage their payments and the amount of debt they take on. For example, a 10-month loan with three refinances would enable a customer to borrow 65% more at a total cost 43% lower relative to a single 24-month loan with the same payments. OppFi verifies the borrower’s good standing and ability to repay prior to facilitating every refinance. No borrower can refinance if they are not paying their current loan, and they can never have more than one loan at a time. A refinance counter is also visible in the customer portal, showing borrowers exactly how many incremental dollars they are receiving, keeping them informed of their options.
Does an OppFi loan help build a customer’s credit over time?
OppFi reports all borrower payments to all three major credit bureaus. OppFi also provides free access to the Zogo financial literacy app and partners with SpringFour to connect customers to a network of more than 25,000 vetted nonprofit and government resources — a service utilized by over 17,000 OppFi customers in 2025 (OppFi 2025 Social Impact Report).
How do customers rate their experience with OppFi?
OppFi has earned a 74 Net Promoter Score from customers so far in 2026, one of the leading figures in the financial industry. Servicing consistently measures highly with a CSAT score above 90%, and OppFi maintains a 4.7 star average on over 12,000 reviews on Google and a 4.4 star average on over 5,000 reviews on TrustPilot.
Reading the Loss Data Correctly
Why do OppFi’s charge-off rates look different depending on the source?
The variance in OppFi’s reported charge-off rates depends on whether the figure represents a lifetime metric or an annualized metric. The lifetime charge-off rate, which divides total dollars charged off by total dollars originated, ranges from 20% to 25% for OppFi, indicating that 75% to 80% of loans are fully repaid. This is the more important charge-off metric for understanding overall repayment rates for individual loans. In contrast, period-over-period financial reporting utilizes the annualized charge-off rate. Because the average duration of an OppFi loan is only about four months (or ⅓ of a year), OppFi’s actual charge-offs are multiplied by a factor of 3 when stated as an annual rate. That misleading translates a 20% lifetime loss rate into an annualized rate of about 60%, even though the underlying dollar loss remains identical.
The Bank Charter Application
Is the loan product itself new, or has OppFi been making these loans for years?
OppFi has facilitated the origination of this same installment loan product for 14 years and has helped serve more than 1.7 million customers. The pending application to acquire BNC National Bank does not create a new lending product; it changes the regulatory structure under which an already-operating business would continue.
Would OppFi be more or less regulated as a bank holding company?
More. Approval would subject OppFi to Federal Reserve oversight of the holding company, OCC examination of the national bank subsidiary, FDIC-insured depository standards, full Community Reinvestment Act evaluation and public rating, and the capital, liquidity, and other prudential requirements that apply to chartered banks but do not apply in the same way to OppFi’s current non-bank lending structure.
Are OppFi’s bank-partnership lending arrangements legally valid?
In May 2026, a California state court reviewed OppFi’s bank-partnership arrangements and found that OppFi’s bank partners independently underwrite and approve loans, fund those loans with their own capital, bear the economic risk of credit loss, and control their own compliance and marketing standards. The court applied the long-standing “valid-when-made” doctrine, under which a loan that is not usurious when originated by a validly chartered bank does not become usurious through a later sale or transfer. With that said, OppFi would not need to maintain these bank-partnership arrangements with a national bank charter, which would clarify and simplify its regulatory structure and oversight.
Does small-dollar lending count toward community reinvestment obligations?
The Community Reinvestment Act requires evaluation of whether a bank meets the credit needs of the communities it serves, including low- and moderate-income communities. OppFi’s customer base includes many borrowers who have already been turned away by conventional underwriting models. If OppFi conducted business through a national bank, that bank's lending and community development activities would be subject to formal CRA examination and assigned a public rating — a level of accountability that does not apply under its current non-bank structure.
How does this merger benefit customers?
Combining with BNC Bank will expand OppFi’s ability to deliver a comprehensive suite of financial products in more states, including Small Business Administration (SBA) lending, secured consumer lending, and wealth management. Access to BNC’s stable, low-cost deposit base will provide diversified funding opportunities and lower funding costs, which we expect will be reflected in lower prices for customers over time. Leveraging OppFi's machine learning and analytics will allow BNC to serve more individuals and communities with convenient, transparent banking services. This merger will maximize the strengths of two mission-aligned companies to expand financial inclusion for underserved Americans and small businesses.
Sources
Chen, Lisa and Gregory Elliehausen. The Cost Structure of Consumer Finance Companies and Its Implications for Interest Rates. Federal Reserve Board, 2020.
Bolen, J. Brandon, Gregory Elliehausen, and Thomas W. Miller, Jr. Effects of Illinois’ 36% Interest Rate Cap on Small-Dollar Credit Availability and Financial Well-Being. December 2022. SSRN: 4315919.
Bank Policy Institute. Costs and Pricing of Bank-Provided Small Dollar Loans. 2020.
OppFi Inc. 2025 Social Impact Report.
Financial Health Network. FinHealth Score Methodology and 2025 U.S. Financial Health Pulse.
FDIC. 2023 National Survey of Unbanked and Underbanked Households. November 2024.
Durkin, Thomas and Gregory Elliehausen. Assessing the Price of Short-Term Credit. November 2013.
Consumer Financial Protection Bureau. Taskforce on Federal Consumer Financial Law Report, Volume 1. January 2021.
Federal Deposit Insurance Corporation. Study of Bank Overdraft Programs. November 2008.
Edmiston, Kelly D. “Could Restrictions on Payday Lending Hurt Consumers?” Federal Reserve Bank of Kansas City, Economic Review, First Quarter 2011.
Carter, Susan Payne and William Skimmyhorn. “New Evidence on the Effects of Payday Lending on Military Members.” Review of Economics and Statistics, Vol. 99, No. 4, 2017.
Adams, Matthew and John Berlau. The Annual Percentage Rate Is the Wrong Metric for Assessing the Cost of a Short-Term Loan. Competitive Enterprise Institute, April 2021.
Chakrabarti, Rajashri, Daniel Garcia, Donald Morgan, and Lee Seltzer. Less for You, More for Me: Credit Reallocation and Rationing Under Usury Limits. Federal Reserve Bank of New York Staff Reports, no. 1173, December 2025.
Servon, Lisa. The Unbanking of America. Houghton Mifflin Harcourt, 2017.