Colorado Approves DIDMCA Opt-Out, Raising Concerns For Consumer Credit Access

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Earlier this month, the Colorado legislature voted to approve HB23-1229, which would opt the State out of Section 521 of the Depository Institutions Deregulation and Monetary Control Act of 1980 ("DIDMCA"), a federal law enacted to create competitive equality between state-chartered banks and national banks. Section 521 gives federally insured banks, state credit unions, and state savings institutions the ability to export the interest permitted under their home state laws to borrowers in other states notwithstanding any interest limitations in the borrower's state.

If enacted, HB23-1229 could require out-of-state banks and credit unions to follow Colorado's interest rate and fee restrictions on consumer loans to Colorado residents if the loans are deemed to be made in Colorado. An amendment to HB23-1229 added in late April would also except certain specifically defined "General Purpose Credit Cards" from the Colorado Uniform Consumer Credit