California DFPI Appeals Trial Court Decision Rejecting Its “True Lender” Theory in OppFi Case

Theory Briefing

• California's DFPI is appealing after a trial court rejected its claim that OppFi, not its bank partner, was the real lender behind the loans.
• The "true lender" theory lets regulators pierce bank-fintech partnerships and apply state interest-rate caps that federal bank charters would otherwise block.
• State regulators and private plaintiffs are increasingly using this theory to challenge bank-partnership lending programs across the country.
• The appeal's outcome could redraw the line between fintech innovation and state consumer-protection law for similar lending arrangements.