As we recently reported, in the wake of the Tenth Circuit’s decision in National Association of Industrial Bankers v. Weiser, 159 F.4th 694 (10th Cir. 2025), Oregon legislators re‑introduced H.B. 4116—legislation designed to opt Oregon out of Section 521 of the Depository Institutions Deregulation and Monetary Control Act of 1980 (DIDMCA). H.B. 4116 aims to prohibit out‑of‑state, FDIC‑insured, state-chartered banks from making consumer finance loans of $50,000 or less to Oregon borrowers using the banks’ home-state interest rates. Instead, those banks’ loans may not exceed Oregon’s law, which caps interest rates at 36%. On March 6, 2026, the legislature passed H.B. 4116. The bill’s next stop will be Governor Kotek’s desk where she is expected to sign it into law. If signed, the law will take effect on June 4, 2026.
As we have discussed previously, DIDMCA leveled the playing field between state-chartered banks and national banks by allowing state-chartered banks to make loans at their home state’s rates, even if the borrower resides in another state that caps interest rates below the banks’ home state rate. National banks have the authority under Section 85 of the National Bank Act to charge interest at the rate permitted by state laws where the national bank is “located,” even when borrowers reside in states that have more restrictive interest rate caps. See Marquette Nat. Bank of Minneapolis v. First of Omaha Serv. Corp., 439 U.S. 299, 313(1978).
Neither DIDMCA, nor any other federal statute, permits a state to opt out of Section 85 of the National Bank Act. Oregon is thus enacting a statute that will only affect a limited segment of lenders—specifically, state-chartered banks. H.B. 4116 does not, and cannot, impose Oregon’s interest rate caps on national banks.
Supporters of H.B. 4116 believe the law will protect Oregon consumers from “predatory loans” by preventing state banks chartered in other states from charging interest rates allowed by the laws of their home states for consumer finance loans to Oregon residents. But, as explained previously, this law will have no impact on rates that national banks may charge, raising doubts as to whether H.B. 4116 can provide the consumer protection its proponents seek to provide.
And, whether Oregon can lawfully dictate the interest rate set by out-of-state state banks (based on their own state’s laws) is legally dubious. Litigation is still pending with respect to Colorado’s 2023, opt out from DIDMCA. The District Court in Colorado held that the operative language—“loans made in such State”—in Section 525 of DIDMCA encompassed only loans made by state banks located in Colorado, and therefore Colorado’s opt-out statute did not limit the interest that could be charged to Colorado borrowers by state banks located outside Colorado. The District Court reasoned, among other things, that only the lender, not the borrower, makes loans. The District Court entered an injunction to prevent enforcement of the Colorado interest rate limits against out-of-state state banks. However, as we have previously reported, in Weiser, the Tenth Circuit reversed that ruling in a 2-1 decision, holding that a loan is “made” for purposes of the opt-out provision in Section 525 of DIDMCA in both the state where the bank is located and the borrower’s state, meaning that Colorado’s usury limits will apply to loans made to Colorado borrowers by out-of-state state banks. A petition for rehearing en banc is still pending, so the District Court’s injunction against enforcement of the Colorado opt-out statute against out-of-state, state-chartered banks remains in effect. Both the Office of the Comptroller of the Currency and the FDIC filed separate amicus briefs urging the Tenth Circuit to grant rehearing en banc. Our firm filed an amicus brief on behalf of the American Banker’s Association and the Bank Policy Institute urging the same result.
Iowa and Puerto Rico are the only jurisdictions, besides Colorado, that are currently opted out from Section 521 of DIDMCA. On March 2, 2026, however, Rhode Island introduced opt‑out legislation, which is currently in committee. At the same time, several other states have considered opt-out legislation in recent years, but none have been signed into law. And in its infancy, as we have discussed, several states opted out of DIDMCA only to later repeal such opt-out legislation.
As we reported recently, the “American Lending Fairness Act of 2026,” introduced in Congress by Senator Moreno and Congressman Davidson, would effectively reverse the Tenth Circuit’s decision, eliminate future opt outs from DICMCA, as applied to out-of-state state-charted banks, and nullify H.B. 4116 and legislation like it.
In the meantime, if the Tenth Circuit denies the petition for rehearing en banc, we anticipate that other states will enact similar opt-out legislation, and that many state-chartered banks involved in interstate lending will consider converting to national banks to avoid the legal uncertainties and business risks created by opt-out laws.