Opportunity Financial, LLC sued the California Department of Financial Protection and Innovation in the Los Angeles County Superior Court over its “true lender” theory, and on May 19, 2026, the court ruled for OppFi. The court granted summary judgment in OppFi’s favor, holding that FinWise Bank was the actual lender and that the partnership didn’t violate AB 539: California’s 36% rate cap on consumer loans between $2,500 and $10,000.
The case, Opportunity Financial v. Hewlett, turned on loans originated by Utah-chartered FinWise Bank through OppFi’s platform. DFPI argued FinWise was a nominal “dummy” lender, its charter rented to circumvent California’s usury limits, making OppFi the actual lender subject to AB 539.
The court didn’t see it that way. It found FinWise independently underwrote and funded the loans from its own capital, retained receivable interests, bore economic risk, and controlled compliance oversight and marketing approvals. The court also relied on the FDIC’s valid-when-made regulation, 12 C.F.R. § 331.4(e): interest permissibility is fixed at origination and cannot be undone by a subsequent loan sale or assignment.
The court didn’t reach OppFi’s two broader arguments — that DFPI’s doctrine was an unlawful underground regulation under California’s Administrative Procedure Act, and that the California Financing Law’s bank exemption independently barred DFPI’s claims. Both issues remain open for the next California enforcement case, and it’s the thread any competent DFPI challenger will pull first.
DFPI has 60 days to appeal to the California Court of Appeals, Second Appellate District. An appeal appears likely.
— James Okafor