By FOCUS, A Leonine Business
A renewed push by state lawmakers to opt out of the Depository Institutions Deregulation and Monetary Control Act of 1980 (DIDMCA) has seen setbacks in 2025, as efforts in Oregon and Rhode Island stall and legal challenges continue in Colorado.
Enacted in 1980, DIDMCA allows FDIC-insured, state-chartered banks to “export” interest rates from their home states into other states, preempting state usury laws. While the law permits states to opt out of this provision, only seven initially did so, six of which later reversed course. Iowa remains the sole original state to remain opted out.
Rhode Island’s attempt to opt out of DIDMCA was short-lived; HB 6055 and SB 386 did not advance before the legislature adjourned on June 20. Without carryover to 2026, the bills are effectively dead. Meanwhile, Oregon’s HB 2561 has stalled in committee. The bill passed the House in February and currently sits in the Senate Labor and Business Committee with just days remaining before the legislature’s scheduled June 29 adjournment.
Colorado’s opt-out, passed in 2023, is now mired in litigation. A federal district court sided with industry groups in June 2024, blocking enforcement of the law and asserting that loans are “made” where the lender operates, not where the borrower resides. While the Federal Deposit Insurance Agency initially backed Colorado’s interpretation, the agency withdrew its amicus brief earlier this year following the change in administration before the Tenth Circuit was scheduled to hear Colorado’s appeal.
These recent developments illustrate the legal and political complexities surrounding DIDMCA opt-outs. Despite increased scrutiny of high-cost lending, states attempting to reassert control over interest rate limits continue to face significant institutional and judicial hurdles. FOCUS will continue to monitor DIDMCA opt-out legislation in states across the country.
by Will Beacom 6/24/25
