So what
Shares of the fintech platform OppFi (OPFI +1.71%) traded more than 10% higher as of 3 p.m. EDT after announcing that the company will avoid punishment in regards to a previously disclosed investigation into its lending practices.
Now what
OppFi is a fintech platform that helps consumers who normally couldn't get access to credit obtain loans from banks. It went public last November through a special purpose acquisition company.
In March, OppFi disclosed that the Consumer Financial Protection Bureau issued the company a civil investigative demand in order to determine whether the company's lending practices had violated the Military Lending Act, a federal law that protects active duty military members from financial practices like exorbitantly high interest rates.
Today, OppFi disclosed that the CFPB does not intend to take enforcement actions against the company, removing previous concerns of investors on the matter.
Image source: Getty Images.
Now what
OppFi is down nearly 30% since completing its SPAC merger and beginning to trade on the New York Stock Exchange. But the company recently reported a second-quarter adjusted profit of nearly $18 million, up from an adjusted profit of just $1.6 million in the second quarter of 2020. Originations have also rebounded considerably from 2020.
The company has revised its full-year guidance downward from the first quarter, but it does appear to be taking a cautious approach. Overall, OppFi seems to have a relatively fair valuation and also appears to be trending in the right direction.
