I was reading about Linney’s Pizza v. Board of Governors of the Federal Reserve System, a case involving a Kentucky pizza shop and the fees merchants pay on debit-card transactions, and it got me thinking about borrowed money. Strip away the pizza and the plastic, and it asks the question now being aimed at consumer lending: What does it cost to provide something, and who decides what the provider may charge?
I learned that lesson before I ever read a court filing. In the restaurant business, the boss ordered food for $10 and put it on the menu for $20. Nobody expected him to sell at cost. The markup paid for employees, rent, utilities, insurance, spoilage and equipment. Everything that keeps the doors open.
Lending is different in one respect. The Truth in Lending Act, through Regulation Z, requires creditors to disclose an annual percentage rate. It hands critics a number that looks like a profit margin. The problem is that APR is represented as a price and interpreted by a borrower as a profit margin. It’s neither.
Consider Opportunity Financial. OppFi’s second-quarter 2026 results report an annualized average yield of 132.4 percent and annualized net charge-offs equal to 52.3 percent of average receivables. Some loans carry APRs as high as 195 percent. This is the figure Sen. Elizabeth Warren cited in her August 14 letter urging regulators to block OppFi’s acquisition of BNC National Bank.
So what remains for the lender? The company disclosed that too. Credit losses consumed 40 cents of every revenue dollar and operating expenses 34 cents more, leaving an adjusted net income margin of 19.8 percent. A healthy business, not a charity, and certainly not the windfall a 195 percent headline implies.
That arithmetic also answers the proposed remedy. At a 36 percent all-in ceiling, gross revenue would fall to about 36 cents per dollar of receivables while charge-offs alone consume 52. No efficiency gain closes a gap that size. A price ceiling set below the cost of production ends the product, a conclusion reached by the research team at the New York Fed.
Which brings us back to pizza. In Linney’s Pizza, merchants argue the Federal Reserve counted costs the Durbin Amendment doesn’t permit, that only the incremental cost of the next transaction belongs in the cap. Four years of litigation later, the courts still have not decided which costs a regulator may count. Fixing a price requires someone to draw that line, and the line is always contestable.
None of this gives OppFi a pass. A 52 percent charge-off rate is fair reason for examiners to ask hard questions on capital, reserves and ability to repay. Those are supervisory questions, and federal law already specifies them: capital, managerial resources, compliance, safety and soundness, competition, community convenience and needs, and financial stability. A senator’s dislike of a lending product is not among them.
And denying this merger does not retire any loans. The same product, at the same price, is originated today by FinWise Bank under a partnership a California court upheld in May. A denial only keeps the lender outside consolidated supervision in a country whose active bank charters have fallen from 8,500 in 2008 to about 4,500.
Today, 68 million Americans live in counties that have no community bank headquarters. The transmission still needs repair. The shift still starts Monday. Eliminating a loan product does not eliminate the emergency that created the need for it.
We don’t ask a restaurant to print the wholesale cost of the Cabernet, the labor and the rent before we order. Maybe we need a Truth in Dining Act. Before ordering that $20 bottle of Cabernet, the menu could tell us exactly what the restaurant paid for it, what went to labor, rent, insurance, and what was left as profit.
It sounds ridiculous. That’s the point.