Enova International has withdrawn its applications with the Office of the Comptroller of the Currency and the Board of Governors of the Federal Reserve System to acquire Grasshopper Bancorp.
Enova is an online financial services company based in Chicago that serves small businesses and consumers who are underserved by traditional banks.
It proposed to buy New York-based digital bank Grasshopper Bank last December in a deal valued at $369 million. Grasshopper Bank, founded in 2019, has $1.5 billion in assets, offering digital financial solutions for commercial and consumer customers.
“After a thorough evaluation, we are confident that withdrawing our applications is the best decision for Enova and our shareholders. Bank regulatory guidelines and attitudes have not kept pace with the realities of meeting the credit needs of tens of millions of consumers and small businesses underserved by traditional banks. Regulators do not have clear standards for nonbanks that want to become banks and that serve customers whose credit needs today are met mostly outside of the banking system. Without clearly articulated standards, the process is susceptible to political pressure and outside advocacy, rather than being guided strictly by the statutory factors that should govern it,” Steve Cunningham, Enova’s CEO, said.
Enova officials added that the company worked constructively and transparently with regulators throughout the application process, responding promptly and fully to requests. Enova officials believe they built an application that satisfies the statutory criteria for approval.
“Enova has proven capabilities, a clear strategy and the best team in the industry. We will continue to leverage these strengths, as well as new products and innovations, to meet the credit needs of the consumers and small businesses that traditional banks are leaving behind. Our future growth and success do not depend on becoming a bank,” Cunningham said.