The California Department of Financial Protection and Innovation (DFPI) has taken the next step in its challenge to a bank-fintech lending program by appealing the Los Angeles County Superior Court’s decision in Opportunity Financial, LLC v. Hewlett. According to the Superior Court docket, a Notice of Appeal was filed on July 21, 2026, ensuring that the closely watched dispute over the “true lender” doctrine will now move to the California Second Appellate District Court of Appeal.
As our readers may recall, we previously discussed the Superior Court’s final Statement of Decision, issued on May 19, 2026 in which the court rejected the DFPI’s contention that Opportunity Financial, LLC (OppFi), rather than FinWise Bank, should be treated as the true lender for purposes of California’s Fair Access to Credit Act. The court concluded that FinWise Bank originated the loans, funded them with its own capital, controlled the underwriting criteria, retained an ownership interest in the loans, and exercised meaningful oversight over the lending program. Based on those facts, the court held that the loans were lawfully made by an FDIC-insured state bank and therefore FinWise Bank could rely on Section 27 of the Federal Deposit Insurance Act to export Utah interest rates into California.
The trial court also relied heavily on the longstanding principle that a loan’s legality is determined at its inception. Because the loans were valid when originated by FinWise Bank, the court rejected the DFPI’s argument that OppFi’s acquisition of a substantial participation interest shortly after origination transformed OppFi into the true lender.
The appeal ensures that the litigation over one of the country’s most important bank-fintech partnership cases is far from over.
Issues Likely to Be Addressed
The appeal is expected to present several significant legal questions, including:
- whether California law recognizes a common-law “true lender” doctrine in the absence of legislation adopting either a predominant economic interest test or a totality of the circumstances test;
- whether the trial court correctly concluded that FinWise Bank, rather than OppFi, was the lender when the loans were originated;
- whether OppFi’s purchase of a 95% participation interest shortly after origination is of any significance;
- whether the longstanding “valid when made” principle was properly applied; and
- whether California’s interest rate limitations are of any relevance when Section 27 of the Federal Deposit Insurance Act authorizes state-chartered FDIC-insured banks to export the interest rates permitted by their home states.
Why This Appeal Matters
The appeal is likely to become one of the most closely watched cases involving bank-fintech partnerships. State regulators and private plaintiffs increasingly have relied on “true lender” theories to challenge lending programs that utilize banks’ federal authority to export interest rates. Conversely, banks, fintech companies, and many industry participants contend that such partnerships are fully consistent with federal banking law and play an important role in expanding access to credit.
Although the Superior Court’s decision represented a significant victory for OppFi and the bank-partnership model, it was a trial court decision without statewide precedential effect. An opinion from the California Court of Appeal, particularly if published, would carry substantially greater significance and could influence courts confronting similar issues in California and elsewhere.
We will continue to monitor this appeal closely and report on significant developments, including the Court of Appeal’s assignment of the case, the parties’ appellate briefs, any amicus filings, oral argument, and the court’s eventual decision.