OR: Joint Industry Letter of Opposition to OR HB 2561

January 30, 2025
Oregon House Committee on Commerce and Consumer Protection
State of Oregon General Assembly

Re: House Bill 2561; Position: Oppose | Information Regarding Lawsuit Challenging Colorado’s DIDMCA Opt-Out Law

Mr. Chair and members of the Committee:

Both the American Financial Services Association (AFSA) and the American Fintech Council (AFC) testified at the January 28, 2025 hearing on House Bill 2561, and submitted written testimony.  Outside counsel for AFSA testified at the hearing specifically to inform the Committee about AFSA’s and AFC’s successful legal challenge to a similar law enacted in Colorado in 2023, and submitted the Colorado federal district court judge’s decision, and a relevant legal brief, to the Committee after the hearing.

We—AFSA, AFC, and the National Association of Industrial Bankers (NAIB)—write to provide the Committee with additional information regarding the legal challenge to Colorado’s 2023 law (Colo. Rev. Stat. § 5-13-106), which, like HB 2561, purported to “opt-out” from the Depository Institutions and Monetary Control Act of 1980 (DIDMCA).  

Like Oregon, Colorado assumed that opting out of DIDMCA meant that Colorado could impose its interest rate caps on loans made by out-of-state, state-chartered banks received by Colorado consumers.  In a June 18, 2024 decision, the Colorado federal district court held that Colorado was wrong.  Congress only authorized a state DIDMCA opt-out to affect loans “made in” the opting-out state, that is – loans made by a bank with key lending operations in the opting-out state.  As a practical matter, this means that a DIDMCA opt-out likely only affects loans made by banks chartered by the opting-out state.  It does not extend to all loans received by Colorado—or in this case, Oregon—consumers.  

Colorado appealed the decision to the United States Court of Appeals for the Tenth Circuit.  Oral argument will be held in March.  It seems unlikely that the appeals court will rule before the current legislative sessions ends.  To avoid the burden and cost of defending a similar legal challenge, and resulting protracted litigation, we urge caution, and for the Committee to at the very least wait for the Tenth Circuit’s ruling before moving forward with HB 2561.  

Along with this letter, we provide quick facts and summary points regarding the Colorado DIDMCA opt-out litigation.

Sincerely,

American Financial Services Association

American Fintech Council

National Association of Industrial Bankers

cc: Dan Rayfield, Attorney General

‍