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D.C. AG Sues Online Lender for Predatory Loans to City Residents

D.C. Attorney General Karl Racine has sued OppFi, an online financial institution accused of making predatory and deceptive loans to thousands of D.C. consumers, for unlawful lending.

The suit alleges that OppFi violated District law by misrepresenting its high-interest loans as fast and easy cash and falsely claiming that its loans would help struggling consumers build credit, according to Racine’s office.

“OppFi lures vulnerable borrowers in with false promises, and then forces them to pay interest rates that far exceed what is allowed in the District,” Racine said in a statement announcing the lawsuit. “This scheme traps OppFi’s victims in cycles of debt. Our office will continue to stand up to bad actors like OppFi, stop them from violating the law, and work to protect District residents from financial harm.”

While most states protect their residents from predatory lenders through state laws that prohibit charging exploitative interest rates, the District’s Consumer Protection Procedures Act prohibits a broad range of deceptive and unfair business practices, including charging unconscionable interest rates and violating other District laws, according to Racine’s office.

Racine said that from at least 2018 until May 2020, OppFi provided high-interest loans that typically ranged from $500 to $4,000 and carried interest rates of up to 198%.

In its lawsuit, the attorney general’s office alleges that OppFi violated District law by allowing D.C. consumers to take out loans for up to 198% — more than eight times the District’s cap on interest rates — resulting in millions of dollars in unlawful interest.

 

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