Committee hears HB 2561 to opt Oregon out of federal interest‑rate export rule amid split between consumer advocates and fintech/lenders

The House Committee on Commerce and Consumer Protection held a public hearing on HB 2561 on Jan. 28. The bill would exercise Oregon’s statutory right to opt out of a federal provision that allows out‑of‑state chartered banks to export their home state’s interest rates (commonly referenced in testimony as the Depository Institutions Deregulation and Monetary Control Act of 1980). The bill also would clarify that Oregon’s interest‑rate cap applies to consumer finance loans made to Oregon residents via the internet and modernize licensing by requiring use of the Nationwide Multistate Licensing System (NMLS).

Department of Financial Regulation officials said some fintech companies use "rent‑a‑bank" arrangements — partnering with out‑of‑state state‑chartered banks — to make loans that exceed Oregon’s 36% interest‑rate cap on small‑dollar consumer finance loans. TK Keane, administrator of the Division of Financial Regulation, told the committee the division recently identified five such rent‑a‑bank schemes during examinations and that two were not complying with Oregon’s…