Since 2005, Oportun Financial Corp. has provided financial options for approximately 1 million low-to-moderate income individuals who have typically been shut out of the financial mainstream due to low credit scores, limited credit history, and persons of color. According to Oportun, the company has disbursed approximately $9 billion to these communities and has saved them more than $1.7 billion in interest and fees.
Recently due to Covid-19, many lender’s practices have come into question regarding their APR rates and legal collections. Oportun has announced that in light of recent events they intend to cap their APRs and reduce the scale of their legal collections, according to Oportun CEO Raul Vazquez.
36% Transparent APR Cap
According to Vazquez, Oportun will begin implementing an “All-In” APR cap of 36% for all newly originated loans. The average APR is currently 34%, however, it typically exceeds 36% for some loans, such as a loan that is smaller and has a term length of fewer than 12 months.
Vazquez also states that Oportun will not participate in the industry standard of charging a low APR while upselling ancillary products such as credit insurance, which they never offered. Vazquez wants Oportun to keep their loans fully transparent in the changing economic environment and through the future. Oportun expects the rate cap to completed by mid-August.
Reduction in Legal Collections
Legal collections are a major part of the lending business. Lenders have used the small claims legal process in an attempt to collect on loans where customers have fallen behind on payments over several months. Oportun states that in 2019 they filed small claims cases in less than 6% of all the loans they originated and pursued a judgment in less than 2%. Instead, Oportun set up repayment plans in two-thirds of the cases they filed in the last five (5) years and did not pursue a claim against any customer that was unemployed and could not pay, says Vazquez.
Effective immediately, Oportun is dismissing all pending cases, suspending all new cases, and plans to reduce future filings by more than 60%. This does not mean that legal collections will be completely stopped for the long term after Covid-19, however. As a lender that specializes in unsecured loans to lower-income individuals, legal collections are inevitable and they can be devastating.
If you have an account with Oportun and are struggling to pay it, we can help. If Oportun sued you, we can also help. Under state and federal laws, we will help you based on a fee-shift provision and/or contingency fee, which means the debt collector pays your attorney’s fees and costs. You won’t owe us a dime for our services. We have settled thousands of debt collection harassment cases, and we’re prepared to help you, too. Contact America’s Consumer Lawyer at 888-572-0176 to stop the harassment once and for all.
