Warren presses Trump regulators to block Enova bank deal over fears of 300% interest loans
Sen. Elizabeth Warren renewed her criticism of President Donald Trump over high-interest lending practices, arguing that his administration is failing to deliver on promises to cap credit card interest rates at 10%.
In a May 21 post on X, Warren wrote: “Time and again, Trump has failed to deliver on his promise to cap credit card interest rates at 10%.”
She added: “The latest test – will his regulators allow a bank to charge interest rates of more than 100% to families across America already struggling with rising costs?”
The senator linked to an article detailing Democratic concerns about a proposed banking acquisition involving online lender Enova International Inc.
Warren and Van Hollen urge regulators to reject Enova deal
Warren and Sen. Chris Van Hollen sent a letter to federal regulators urging them to reject Enova International’s proposed $369 million acquisition of Grasshopper Bank.
The lawmakers argued the transaction would allow Enova to expand high-interest lending nationwide by leveraging Grasshopper’s national banking charter. According to the senators, the deal could enable loans with interest rates reaching as high as 300%.
Warren currently serves as the top Democrat on the Senate Banking Committee, giving her a prominent role in scrutinizing banking mergers and consumer finance issues.
The senators said Enova’s acquisition would allow the company to sidestep state-level interest rate caps through federal banking rules.
Because Grasshopper holds a national charter from the Office of the Comptroller of the Currency, the bank can export interest rates across state lines under federal law. Warren and Van Hollen warned that Enova could use that authority to issue high-cost loans in states that otherwise prohibit such rates.
“By acquiring Grasshopper and moving the bank’s headquarters, Enova would succeed in unlocking the benefits of the bank’s national bank charter for the purposes of expanding Enova’s predatory lending strategies to the national stage, side-stepping the interest rate caps of 45 states,” Warren and Van Hollen said.
Planned headquarters move to Utah raises additional concerns
The senators also objected to Enova’s proposal to move Grasshopper’s headquarters from New York to Utah.
According to the lawmakers, New York imposes a 25% criminal usury cap, while Utah has no state interest rate ceiling. They argued the relocation would make it easier for Enova to issue high-interest loans nationwide without being constrained by stricter state laws.
The lawmakers addressed their concerns to incoming Kevin Warsh and Comptroller of the Currency Jonathan Gould, both of whom would play key roles in approving the merger.
Regulators face pressure as fintech charter activity accelerates
The proposed merger requires approval from both the Federal Reserve and the OCC under the Bank Holding Company Act and the Bank Merger Act.
The Fed declined to comment publicly on the proposal, while the OCC and Enova did not immediately respond to requests for comment.
The dispute comes as the Trump administration pushes for broader participation by fintech firms and digital lenders in the federal banking system. Earlier this week, Trump signed an executive order directing banking agencies to revise regulations and charter application processes to “facilitate innovation and greater competition in the provision of financial services.”
Federal banking agencies have increasingly opened the door to nontraditional financial firms under the Trump administration.
The OCC has granted new charters to several cryptocurrency-related companies despite objections from banks and consumer advocacy groups. Meanwhile, the Fed in March allowed crypto platform Kraken to become the first digital asset bank to gain direct access to the federal payments system.
Critics argue the regulatory shift could weaken consumer protections and create new risks if fintech firms gain bank-like privileges without equivalent oversight standards.
Consumer advocates cite Enova’s regulatory history
Consumer advocacy organizations have strongly opposed Enova’s bid, pointing to prior enforcement actions involving the company.
The Consumer Financial Protection Bureau fined Enova $3.2 million in 2019 during Trump’s first term. Regulators accused the lender of withdrawing money from customers’ accounts without authorization and improperly canceling loan extensions previously granted to borrowers.
The CFPB later imposed an additional $15 million penalty against Enova in 2023 for allegedly violating terms of the earlier consent order.
Enova operates lending businesses through subsidiaries including CashNetUSA and NetCredit.
According to Warren and Van Hollen, the companies already issue loans with rates as high as 300% in states that permit triple-digit interest rates. In states with tighter restrictions, NetCredit reportedly offers loans carrying annual percentage rates of 99.9%.
The senators argued the proposed acquisition would give Enova greater ability to expand those practices nationwide through a federally chartered bank structure.
Lawmakers point to high charge-off rates as warning sign
The senators also highlighted Enova’s loan charge-off rates, which they said exceed 50% in some cases.
Charge-offs occur when lenders determine debts are unlikely to be repaid. Warren and Van Hollen argued that such elevated rates indicate potentially unsafe or unsustainable lending practices compared with traditional banks.
They warned regulators that approving the merger could expose more borrowers to high-cost debt while increasing risks within the banking system.
Warren reminds Trump of 10% credit card interest cap promise
Warren used the opportunity to remind Trump of his Jan. 9 post on Truth Social. Trump had posted, “Please be informed that we will no longer let the American Public be ‘ripped off’ by Credit Card Companies that are charging Interest Rates of 20 to 30%, and even more, which festered unimpeded during the Sleepy Joe Biden Administration,” Trump wrote in his post. “AFFORDABILITY!”
Trump said his call for lower rates was “effective January 20,” which was the one-year anniversary of his inauguration.
A week after the post, on Jan. 16, it was reported that the White House was considering executive action to implement a 10% cap on credit card interest rates.
White House Press Secretary Karoline Leavitt said at the time that the president expected companies to reduce their rates by Jan. 20.
The growing number of fintech-bank combinations is likely to intensify debates in Washington over consumer protection, federal preemption, and the future of high-interest lending in the U.S as midterms draw closer.
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John Dealbreuin came from a third world country to the US with only $1,000 not knowing anyone; guided by an immigrant dream. In 12 years, he achieved his retirement number.
He started Financial Freedom Countdown to help everyone think differently about their financial challenges and live their best lives. John resides in the San Francisco Bay Area enjoying nature trails and weight training.
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