Enova International (NYSE:ENVA) has stepped away from its planned purchase of Grasshopper Bancorp, withdrawing the regulatory filings needed to complete the transaction. The Chicago-based online lender said on September 14 that it had pulled applications submitted to the Office of the Comptroller of the Currency (OCC) and the Federal Reserve Board.
The company had agreed in December 2025 to acquire the New York digital bank and its national bank subsidiary in a cash-and-stock transaction valued at about $369 million.
Grasshopper, launched in 2019, held more than $1.4 billion in assets as of late 2025.
Enova had framed the combination as a path to becoming a bank holding company, gaining deposit funding, and expanding products for consumers and small businesses that traditional banks often leave underserved.
Management had projected the deal would lift adjusted earnings per share by more than 15 percent in the first year and more than 25 percent once synergies were realized.
Closing had been targeted for the second half of 2026.
That timeline will not be met. Chief Executive Steve Cunningham said the company concluded, after a full review, that withdrawing the applications was the better course for Enova and its shareholders.
He argued that supervisory rules and attitudes have not kept up with the credit needs of millions of households and small firms served largely outside the banking system.
In his view, agencies lack clear standards for nonbanks seeking to own banks, leaving the process open to political pressure and outside advocacy instead of the statutory factors that should govern approval.
The proposed deal had drawn criticism from consumer groups and a July letter from 20 state and district attorneys general, who urged regulators to reject it over concerns that Enova might use a bank charter to sidestep state interest-rate limits.
Enova said it had cooperated fully with reviewers and believed its filing met legal requirements.
Neither the OCC nor the Federal Reserve had issued a public decision before the company withdrew.
Enova stressed that its growth plans do not depend on a bank charter.
It reaffirmed the 2026 outlook issued in July, including roughly 25 percent third-quarter revenue growth and about 30 percent growth in adjusted earnings per share.
The company also said it intends to speed share repurchases for the rest of the year, citing balance-sheet strength and available capacity under existing authorizations and debt covenants.
Investors reacted sharply.
Shares fell more than 20 percent in the sessions after the announcement, wiping out equity value well in excess of the deal’s headline price.
The merger agreement included a $5 million termination fee payable by Enova in certain circumstances; the company announced only the withdrawal of regulatory applications, not a formal termination of the contract.
The episode highlights the difficulty nonbank lenders face when they try to enter the insured banking system. Enova said it will keep evaluating options as the regulatory climate evolves, but for now it will pursue growth through its existing platforms and product innovation.