Attorney General Dan Rayfield is leading a coalition of 18 attorneys general urging the U.S. House of Representatives to vote No on H.R. 7866, a bill that would make it easier for predatory lenders to charge Oregonians triple-digit interest rates and sidestep the state’s consumer protection laws.
“Too often, we’ve seen working families buried in debt from lenders charging triple-digit interest,” said Attorney General Rayfield. “That’s why Oregon has passed laws capping predatory interest rates—and we’re not going to stand by and watch Congress carve out a massive loophole for lenders to exploit our struggling neighbors.”
In 2007, then-Speaker Jeff Merkley (now US Senator) successfully sponsored a bill in the Oregon legislature capping interest rates at 36%, reining in out-of-control interest rates from short-term lenders. Many other states and Washington, D.C. also cap how much interest lenders can charge on consumer loans. Those limits help keep people from getting buried under debt they can never realistically pay off.
Despite these state laws, federal law allows state-chartered banks to follow their home state’s interest-rate rules when they lend to people in other states. Under that federal law–the Depository Institutions Deregulation and Monetary Control Act, or DIDMCA–banks based in states with no cap on interest rates can generally charge other states’ borrowers more than local law would otherwise allow. But—importantly—Congress has allowed states to opt out and keep enforcing their own interest-rate limits on out-of-state banks lending to their residents.
But that has changed. In recent years, some online lenders have teamed up with banks in states that don’t cap interest rates, using the bank as a front to offer loans to consumers far above what local laws allow. These are often called “rent-a-bank” schemes.
To shut down that massive loophole, states have turned to the opt-out Congress gave them. Oregon lawmakers passed House Bill 4116(Opens in a new tab/window) in 2026 to keep out-of-state banks and online lenders from charging Oregonians more interest than Oregon law would otherwise allow.
States have also pushed back when predatory online lenders tried another route around those limits: buying a bank outright. Earlier this year, Attorney General Rayfield joined attorneys general from across the country in urging federal banking regulators to reject bids by two online lenders, Enova and OppFi, to acquire national banks, warning the deals could let the companies sidestep state interest-rate caps. In the face of this advocacy effort by state AGs, both have since abandoned their plans. Enova withdrew its applications in September, citing “political pressure and outside advocacy,” and OppFi withdrew its applications on Nov. 3.
What H.R. 7866 would do
H.R. 7866 would take away the opt-out that states like Oregon have relied on. States would no longer be able to enforce their interest-rate limits against out-of-state banks – or the lenders partnering with them – leaving Oregonians more exposed to high-cost loans at the very moment these schemes are growing.
The AGs’ letter urges Congress to reject the bill and respect states’ long-standing role in protecting their residents from predatory, high-cost lending.
Attorney General Rayfield led the letter, which was also signed by the attorneys general of Arizona, California, Colorado, Connecticut, the District of Columbia, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New York, Virginia, and Washington.
A copy of the letter is available here.
