Online consumer lender OppFi lays off 5% of its staff

OppFi employs 541 people, virtually all of them in Chicago. At the end of the year, its workforce stood at 573, according to a Securities & Exchange Commission filing.

“We are focused on efficiency for future business growth to better champion the need for banks to serve consumers who struggle to qualify for traditional forms of credit,” the company said in a statement. press release sent by e-mail.

The cuts come as another senior executive leaves the company. CFO Shiven Shah, who has been with OppFi for five years, is stepping down from the role, just four weeks after signing a new contract.

His departure closely follows the exit of Neville Crawley, who left after less than two months as CEO. Founder and Executive Chairman Todd Schwartz succeeded Crawley. Pamela Johnson, who joined OppFi last year as chief accounting officer, will take over as chief financial officer, the company announced on March 25.

Shah will remain as a consultant throughout the second quarter.

The employment contract Shah entered into with the company on February 28 appears to entitle him to a severance package of at least $500,000. OppFi confirmed in a filing with the SEC that it would receive “its severance payments” set out in the pact.

The deal entitled Shah to a salary of $375,000 plus bonus opportunities. Under the agreement, his severance package is at least one year’s salary from June 30 plus his prorated salary between March 28 and that date. He will also receive his 2022 bonus until June 30, “as long as it is earned”.

His target bonus for the year was 60% of his salary, or $225,000.

Asked to confirm the numbers, a company spokeswoman said OppFi would have no comment beyond posting Johnson’s promotion.

That release didn’t talk about the severance arrangement, but Schwartz had some kind words to say about Shah. “Shiven’s contributions to OppFi have been immeasurable, during a period of exceptional growth and our listing on the NYSE,” Schwartz said. “Shiven has been a trusted partner and friend of the company for the past five years, and we are fortunate to have him leading OppFi’s finance organization. We wish him well in his future endeavours. »

It’s been a bumpy road since OppFi went public in a blank check deal last July. The stock has fallen more than 63% since then, including 16% so far this year. It is now trading below $4 after going public at $10.

OppFi was seventh on Crain’s “Fast 50” list last year with a five-year growth rate of nearly 3,600%. The company lends at high interest rates over the Internet to consumers with poor credit. It has been the target of consumer advocates who criticize OppFi for its “rent-a-bank” tactics that allow it to evade state-imposed caps on interest rates by using nationally chartered banks to fund loans generated by OppFi.

OppFi filed earlier this month in Los Angeles Superior Court to overturn the state of California’s decision that its loans are subject to interest rate caps despite using a chartered bank. federal.

“Loans made through the OppFi platform are constitutionally and statutorily exempt from California’s maximum interest rate caps because the loans are made by Member FDIC FinWise Bank, a state-chartered bank located in Utah,” OppFi said in a March 8 statement. “It’s a well-established federal law that allows state-chartered banks to export the interest rates allowed in their charter state to any other state in the country.”

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