NetCredit and its parent company, Enova International, have faced a decade of legal trouble: a NetCredit lawsuit filed by the Virginia Attorney General in 2018 remains active after reaching the state supreme court, the Consumer Financial Protection Bureau has fined Enova twice for unauthorized bank withdrawals, and federal class actions continue to test whether the company’s high-rate loans and arbitration clauses hold up in court. A pending bid to buy a national bank could reshape the fight entirely.
The Virginia Attorney General Case
On May 4, 2018, Virginia Attorney General Mark R. Herring sued NC Financial Solutions of Utah, LLC, the entity behind NetCredit, in Fairfax County Circuit Court for violating the Virginia Consumer Protection Act.1Virginia Attorney General. Herring Alleges Illegal Predatory Loans in Suit Against One of Virginia’s Largest Online Lenders The complaint alleged that between 2012 and 2018, NetCredit issued loans of $1,000 to $10,000 to more than 47,000 Virginia borrowers at interest rates from 34% to 155%, well above Virginia’s 12% annual cap for lenders without a state exemption.2Supreme Court of Virginia. Commonwealth of Virginia v. NC Financial Solutions of Utah, LLC, Record No. 190840 One borrower cited in the case ended up owing more than $6,000 on a $2,000 loan.3Virginia Attorney General. Herring Warns Virginians About Dangers of Predatory Loans
The state also accused NetCredit of operating in Virginia without a license, misleading borrowers about its Utah licensure to sidestep state rate caps, and continuing automatic bank withdrawals from borrowers who had filed for bankruptcy despite court-ordered stays.1Virginia Attorney General. Herring Alleges Illegal Predatory Loans in Suit Against One of Virginia’s Largest Online Lenders
The Arbitration Ruling
NetCredit moved to force the case into private arbitration, pointing to mandatory arbitration clauses in its loan agreements. The Fairfax County Circuit Court denied that motion in February 2019, and on February 25, 2021, the Supreme Court of Virginia unanimously affirmed.2Supreme Court of Virginia. Commonwealth of Virginia v. NC Financial Solutions of Utah, LLC, Record No. 190840
The court held that the Commonwealth was never a party to the loan agreements and cannot be bound by their arbitration provisions. The Attorney General acts in the public interest to enforce consumer protection law, not as a stand-in for individual borrowers. The court also rejected NetCredit’s argument that the Federal Arbitration Act preempted Virginia’s position, finding that the FAA “does not require parties to arbitrate when they have not agreed to do so.”4U.S. Supreme Court Docket. NC Financial Solutions of Utah v. Commonwealth of Virginia, Brief in Opposition The case returned to the circuit court on the merits. No final judgment or settlement has been publicly reported as of mid-2026.
CFPB Fines Against Enova
The Consumer Financial Protection Bureau has taken enforcement action against Enova twice, both times over withdrawing money from consumer bank accounts without proper authorization.
In 2019, the CFPB ordered Enova to pay a $3.2 million civil penalty after finding it had debited consumer accounts without authorization and failed to honor granted loan extensions. A consent order barred the company from initiating electronic fund transfers without valid authorization.5National Consumer Law Center. NCLC Comments to OCC Regarding Enova Bank Charter Application
Enova then violated that consent order. In November 2023, the CFPB fined the company $15 million, finding it had continued to debit or attempt to debit accounts without consent, including through unauthorized changes to payment authorizations purchased from third-party lead generators. Enova had to provide redress to affected consumers and retain a third-party consultant to verify delivery. The CFPB terminated the 2023 order on September 2, 2025, after confirming Enova had fulfilled its obligations.6Consumer Financial Protection Bureau. Enova International, Inc. Enforcement Action
Federal Class Actions
Trawick v. NetCredit Loan Services
Janet Trawick filed a class action complaint against NetCredit Loan Services, LLC on August 20, 2024, in the U.S. District Court for the Northern District of Illinois, classified as a consumer credit action.7CourtListener. Trawick v. Netcredit Loan Services, LLC NetCredit moved to compel arbitration in October 2024. The parties then agreed to pause that dispute while the Seventh Circuit considered a related case, Harris v. W6LS, Inc. (No. 24-2056), on whether the “prospective waiver doctrine” applies to substantive rights under state law.8Midpage. Trawick v. NetCredit Loan Services
On August 22, 2025, Judge April M. Perry ruled on the arbitration motion, finding that regardless of the Seventh Circuit’s pending decision, the arbitration agreement in Trawick did not prospectively waive any substantive state or federal rights.8Midpage. Trawick v. NetCredit Loan Services The case remained active at the end of 2025.7CourtListener. Trawick v. Netcredit Loan Services, LLC
Engelsen v. NetCredit Loan Services
Jennifer Engelsen sued NetCredit Loan Services, Republic Bank & Trust Company, and Trans Union, LLC on July 3, 2025, in the U.S. District Court for the Middle District of Florida, bringing claims under the federal RICO statute in a consumer credit case. The case settled quickly. Engelsen filed a notice of settlement on September 10, 2025, and Judge Roy B. Dalton Jr. dismissed the case with prejudice two days later. Settlement terms were not made public.9PACER Monitor. Engelsen v. NetCredit Loan Services, LLC et al
The Lending Model Behind the Lawsuits
Most of the cases against NetCredit trace back to the same structure. NetCredit does not hold lending licenses in most states where it operates. It partners with FDIC-supervised banks — primarily Republic Bank & Trust Company of Kentucky and Capital Community Bank of Utah — that originate the loans.10NetCredit. NetCredit Lending Partners Because chartered banks can generally “export” the interest rate laws of their home states, this arrangement lets NetCredit offer loans at rates that would otherwise violate the borrower’s home-state usury caps. NetCredit services the loans; the partner bank retains only about 5% of outstanding balances, according to an analysis of Republic Bank’s operations.11National Community Reinvestment Coalition. NCRC and 10 Other Advocacy Groups Call on the FDIC to Downgrade Republic Bank & Trust
Consumer advocates and state regulators call this a “rent-a-bank” scheme. The National Consumer Law Center classifies these arrangements as being of “questionable legality,” arguing that the non-bank company is the “true lender” and should be subject to state interest rate limits.12National Consumer Law Center. High-Cost Rent-a-Bank Loan Watch List Plaintiffs in multiple cases have advanced this “true lender” theory, contending that if courts look past the bank’s role, NetCredit’s loans in states like Virginia, Illinois, and California exceed legal rate caps and are void or unenforceable. NetCredit’s disclosed installment loan APRs range from 34.99% to 99.99%.13National Consumer Law Center. NCLC Comments to Federal Reserve Regarding Enova-Grasshopper Application
The Bank Charter Application That Could Change Everything
In January 2026, Enova filed applications with both the Office of the Comptroller of the Currency and the Federal Reserve Board to acquire Grasshopper Bank, a New York-based national bank, for approximately $350 million.14Federal Reserve. Enova International Application Public Exhibits The deal would make Enova a bank holding company and give it a national bank charter through a newly formed entity called Enova Interim Bank, N.A.15Federal Register. Formations of, Acquisitions by, and Mergers of Bank Holding Companies
If approved, the charter would let Enova lend nationwide under federal banking law rather than relying on third-party bank partnerships, largely defusing the “true lender” theory that underpins most active NetCredit litigation.
Consumer groups have pushed back. In February 2026, the NCLC submitted formal comments to the OCC urging denial, arguing that Enova seeks the charter specifically to enable nationwide lending at triple-digit APRs and that its regulatory history and charge-off rates fall short of the standards required of a national bank.5National Consumer Law Center. NCLC Comments to OCC Regarding Enova Bank Charter Application A separate NCLC filing asked the Federal Reserve to deny the holding-company application on the same grounds.13National Consumer Law Center. NCLC Comments to Federal Reserve Regarding Enova-Grasshopper Application Enova’s public filings show annualized net consumer loan charge-off rates of roughly 52%, which the NCLC argues is “per se unsafe and unsound.”16National Consumer Law Center. NCLC Appendix to OCC Comments
As of mid-2026, the Federal Reserve had issued multiple information requests to Enova and taken public comments, but neither agency had announced a final decision.17Federal Reserve. Enova-Grasshopper Application Related Materials Until then, the Virginia case, the Trawick class action, and the underlying bank-partnership model all remain live legal exposures for NetCredit.