Enova Cuts Losses, Abandons Bid for Grasshopper Bancorp Amid Regulatory Uncertainty

Enova International, a nonbank consumer lender based in Chicago, has withdrawn its applications to acquire Grasshopper Bancorp. The decision comes nine months after Enova announced it would buy the New York City-based bank for approximately $369 million in a cash-and-stock deal.

The reversal is due to unclear regulatory approval standards for nonbanks that want to buy national banks, according to Enova CEO Steve Cunningham.

Cunningham criticized the deal-approval process during a conference call with analysts, saying regulators have encouraged nonbanks to enter the banking system but have not clearly articulated the standards for companies like Enova.

Enova's press release stated only that the company had withdrawn its applications with the Federal Reserve Board and the Office of the Comptroller of the Currency. The merger agreement contained a $5 million termination fee, which would be payable by Enova if it were to terminate the transaction.