This week, Partners for Rural Transformation (PRT) submitted a letter to Federal Reserve leadership urging the Board of Governors to deny the proposed merger application between Enova and Grasshopper Bank. Approving this transaction would expand high-cost predatory lending and harm rural and Native communities facing persistent poverty.
The Federal Reserve, under the Bank Holding Company Act, has the responsibility to consider the convenience and needs of the communities to be served by actions like the Enova-Grasshopper merger. PRT contends that this merger fails that test because it could allow Enova to expand high-cost lending through a national bank charter, potentially overriding stronger state consumer protections in places that currently limit predatory interest rates. Many states with such protections are rural. If this merger is approved, it would be an unprecedented move to grant a bank charter to a lender dedicated to triple-digit interest rate loans.
The letter highlights the real-world consequences of these practices for families and small businesses in rural and Native communities. Unaffordable loans can trap borrowers in cycles of debt, drain wealth from local economies, and create barriers to homeownership, entrepreneurship, and long-term financial stability. Low-wealth and low-income communities are especially vulnerable to these harms.
PRT is calling on the Federal Reserve to reject the merger application and prevent a new wave of predatory lending from flooding rural and Native communities. The full letter outlines the coalition’s concerns and reinforces PRT’s commitment to building a future in which persistent poverty is replaced by lasting opportunity and shared prosperity.
PRT is a coalition of six community rooted organizations that stretch across the country with deep expertise in persistent poverty communities. PRT is working to dismantle the historic and ongoing disinvestment in our communities and end cycles of persistent poverty by strengthening local economies, generating local wealth, and building power within the community.