Opportunity Financial, LLC sued DFPI Commissioner Clothilde Hewlett in Los Angeles County Superior Court back in 2022 to head off a “true lender” crackdown, and DFPI cross-complained. Judge Gary D. Roberts rejected the department’s theory in a Statement of Decision issued May 19, 2026. DFPI filed its notice of appeal on July 21, sending the fight to California’s Second Appellate District Court of Appeal.
At issue: California’s Fair Access to Credit Act, which caps rates at 36% on loans between $2,500 and $9,999 made by finance lenders. DFPI’s cross-complaint called the OppFi-FinWise arrangement a “rent-a-bank ruse,” arguing OppFi held the real economic interest because it buys a 95% participation interest in loan receivables within days of origination. FinWise Bank funded the loans, ran underwriting, and kept an ownership stake, so it could export Utah’s rates into California under Section 27 of the Federal Deposit Insurance Act. A loan’s legality is set at origination, not by who buys the paper afterward.
That gap in California law is the whole ballgame here. California hasn’t codified a predominant economic interest test for true lender claims, and the trial court made DFPI pay for the missing statute. A published appellate opinion affirming Judge Roberts would bind every California court weighing the next bank-fintech partnership dispute, right as state regulators nationwide lean harder on true lender theories to reach loans that skip past rate caps.
DFPI’s cross-complaint was the harder case to prove: a federally insured bank is a sham lender, without a statute defining a sham. It’s now betting that theory on three appellate judges instead of one trial judge. The Court of Appeal hasn’t yet assigned the case or set a briefing schedule.
— James Okafor