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Oregon committee hears testimony on bill to block out‑of‑state lenders from sidestepping 36% rate cap
Summary
The House Committee on Commerce and Consumer Protection held a Feb. 3 hearing on HB 4,116, which would opt Oregon out of Section 521 of the Depository Institutions Deregulation and Monetary Control Act of 1980 to prevent some out‑of‑state lenders from using federal preemption to charge rates above Oregon's 36% APR cap. Supporters said it restores state authority; opponents warned it could reduce access to small emergency credit.
Chair Sosa opened a public hearing Feb. 3 on House Bill 4,116, a proposal to opt Oregon out of Section 521 of the Depository Institutions Deregulation and Monetary Control Act of 1980 so that Oregon's 36% APR cap on consumer finance loans would apply to loans made to Oregonians even when a lender is chartered in another state.
"Almost 20 years ago, Oregon said that the maximum interest rate that can be charged by a lender for a consumer finance loan is 36%," Representative Nathan Sosa said, describing a set of cases in which out‑of‑state lenders partner with state‑chartered banks to rely on federal law and charge much higher rates. "Instead of capping their interest rates at 36% like everybody else, this handful of lenders is making loans with interest rates of…
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