Louisville, KY

Republic Bank Partner Fined for Deceiving Consumers

Advocate Andy

Louisville-based bank earned millions from nonbank lender that defrauded customers

A key source of income for a Louisville-based bank is under scrutiny as a federal regulator issues a $15 million fine to the parent company of NetCredit.

The Consumer Financial Protection Bureau (CFPB) fined Enova, NetCredit's parent company, $15 million for illegally debiting customer bank accounts and for other acts of deception.

A report by the National Community Reinvestment Coalition (NCRC) indicates that Republic Bank & Trust is a partner with and earns millions of dollars a year from NetCredit.

NetCredit notes on its website:

In states where NetCredit loans and lines of credit are offered by a lending partner bank, loans and lines of credit are underwritten by, approved by and funded by Republic Bank & Trust Company or Transportation Alliance Bank, Inc. d/b/a TAB Bank.

The NCRC report notes that loans offered by NetCredit can carry interest rates up to 100%. The report further notes that in 2022, Republic's partnerships with nonbank lenders such as NetCredit accoutned for more than 30% of the bank's net revenues.

As NCRC states:

During the last three years, Republic has recorded over $75 million in interest income from loans made in partnership with high-cost non-bank lenders.

The enforcement order against NetCredit and its parent company, Enova, prohibits the businesses from offering certain short-term loans for a period of seven years.

It's not clear how this prohibition will impact Republic Bank's revenue. Republic has not yet indicated it has any intention of severing ties with the troubled NetCredit/Enova entities.

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Andy Spears is a middle Tennessee writer and policy advocate. He reports on news around public policy issues - education, health care, consumer protection, and more.

Nashville, TN

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