Fintechs Fear Contagion of Colorado’s Interest Rate Import Ban

Fintech companies are alarmed at the possible contagion of Colorado’s pending move to opt out of a federal law that allows them to evade the state’s loan interest rate caps by partnering with out-of-state banks.

Fintech lenders often get around a state’s interest rate cap by partnering with banks chartered in another state to “import” rates that exceed the cap. Fintechs say the Colorado legislation will make it difficult to partner with other-state-chartered banks to issue loans in Colorado. Online lenders in Colorado have already faced a series of enforcement actions by the state’s attorney general, Phil Weiser (D).

They ...