Trade Groups Challenge Oregon’s DIDMCA Opt-Out Law

On June 15, three financial services trade associations filed suit in the U.S. District Court for the District of Oregon seeking to block Oregon House Bill 4116, which became effective on June 5. The complaint alleges that the law exceeds Oregon’s authority under the Depository Institutions Deregulation and Monetary Control Act of 1980 (DIDMCA) and violates the Dormant Commerce Clause.

H.B. 4116 amended Oregon’s Consumer Finance Act and exercised the state’s authority under Section 525 of DIDMCA to opt out of Section 521, which generally permits state-chartered banks to export interest rates authorized by the laws of the states where they are located. According to the complaint, however, Oregon went beyond opting out by attempting to apply its 36% interest-rate cap to certain loans made by out-of-state state-chartered banks under their home-state laws. Specifically, the complaint alleges that: