A California court has finalized a summary judgment in favor of OppFi, a financial services company, in its dispute with the state’s Department of Financial Protection and Innovation (DFPI). The ruling, issued on May 19, 2026, rejected the DFPI’s “true lender” theory, which alleged that OppFi was the actual lender on loans originated through its partnership with FinWise Bank, a Utah state-chartered bank.
The litigation, which began in 2022, centered on whether OppFi violated California’s interest rate caps under the Fair Access to Credit Act. The DFPI had sought penalties of at least $100 million and restitution for approximately 38,000 California borrowers, claiming that OppFi’s partnership with FinWise was a “rent-a-bank” scheme to evade the state’s rate cap.
The court applied the framework of Janisse v. Winston Investment Co. and found that FinWise was not a “dummy” lender, as it controlled the application and underwriting process, funded loans with its own money, and retained title and ownership. The court also noted that FinWise bore 100 percent of the risk of loss at origination and retained a 2 percent to 5 percent interest in receivables.
The court rejected the DFPI’s argument that OppFi’s ownership of the intellectual property to its credit model made it the lender, noting that banks routinely use third-party models without making the model owner the lender. The court also found no evidence that OppFi’s collateral account was used to fund loans, observing that the account was “almost always insufficient” to cover FinWise’s funding obligations.
The ruling has significant implications for financial services companies and fintech programs that involve contractual partnerships with depository institutions. It upholds the validity of these programs against “true lender” claims and highlights the importance of well-developed programs with specified key indicators of bank involvement, such as data costs and regulatory compliance.
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These key indicators include independent underwriting authority, funding with the bank’s own capital, economic risk retention, and marketing and regulatory compliance oversight. The ruling also emphasizes the importance of evaluating for usury at inception, rather than after the fact.
In practice, this development means that companies like OppFi will need to carefully evaluate their partnerships with banks to ensure that they are compliant with state and federal regulations.
The court’s treatment of the underground regulation issue may also signal a warning to state agencies against pursuing the industry under unwritten rules, which could have significant implications for the development of financial services regulation in California and beyond.
If the decision is upheld, it could set a precedent for the treatment of bank partner programs in California and potentially limit the ability of state regulators to pursue “true lender” claims.
