FinTech Oportun acquires the Digit banking platform

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Fintech Oportun has acquired the neobanking platform Digit, which provides automated savings, investment and banking tools, to businesses announcement Wednesday (December 22).

Oportun works in the area of ​​low to moderate income loans. By acquiring Digit, Oportun will strengthen its artificial intelligence (AI) and digital capabilities to further help its customers meet financial needs.

The acquisition was completed for $ 211.1 million, of which a total of approximately $ 112.6 million in cash and $ 98.5 million in common shares.

Digit, founded in 2013, gives members access to personalized savings, investing and banking tools, and users can both maintain and integrate bank accounts into the platform. They can also open new accounts through Digit’s banking partner.

Digit is AI enabled and sets aside funds automatically for members by analyzing cash flow and recognizing how much can be set aside and invested. He also tries to stay within the limits of the immediate financial means of a member.

Digit would operate as a business unit within Opportunity and would still be led by Ethan Bloch, founder and CEO of Digit.

Oportun also recently withdrew its request for a bank charter, writes PYMNTS.

See also: Latino-focused lender Oportun terminates bank charter after CFPB investigation

The withdrawal was at the discretion of Timely and came because the Consumer Financial Protection Bureau (CFPB) had looked into allegations that Oportun violated consumer protection laws through its collection practices – in particular, those focused on difficult treatments for the pandemic.

The report said nearly two dozen consumer groups had written a request to wait until the CFPB had completed its investigation before the company would move forward with a charter.

Oportun said he had a “constructive relationship” with the Office of the Comptroller of the Currency (OCC) and would pursue a charter in the future, with elements amended “to reflect changes in our business.”

Oportun faced controversy in 2020, with reports the company had sued thousands of low-income Latinos to collect debt since the early days of the pandemic.

The company responded by saying it would write off debts, suspend new deposits and cap its interest rate at 36%.

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