Banks, Fintechs Sue Over Oregon Law Barring ‘Rent-a-Bank’ Loans

An Oregon law violates the constitution by barring out-of-state banks from issuing to its residents loans that violate the state’s interest rate caps, banks and financial technology companies say in a new lawsuit.

The National Association of Industrial Bankers, the Online Lenders Alliance, and the American Financial Services Association are seeking to block Oregon’s HB 4116, which opts the state out of the 1980 Depository Institutions Deregulation and Monetary Control Act’s interest rate portability provisions. Their lawsuit was filed Monday in the US District Court for the District of Oregon.

Oregon’s measure was signed into law by Gov. Tina ...