A significant amicus brief was filed yesterday by many bank industry trade associations in the U.S. District Court for the District of Oregon in National Association of Industrial Bankers v. O’Day. This case challenges Oregon House Bill 4116’s attempt to utilize the state’s opt-out from Sections 521 through 523 of the Depository Institutions Deregulation and Monetary Control Act of 1980 (“DIDMCA”) as a basis to regulate interest rates charged by out-of-state state banks.
This amicus brief was submitted by an impressive coalition consisting of the American Bankers Association (“ABA”), the Bank Policy Institute (“BPI”), the Consumer Bankers Association (“CBA”), and 51 state bankers associations. The breadth of the support is noteworthy. In addition to the three leading national banking trade associations, virtually every state bankers association in the country joined the filing, underscoring the industry’s view that the Oregon law presents issues with nationwide implications for the dual banking system and interstate lending.
The amici explain that their members include numerous FDIC-insured, state-chartered banks headquartered outside Oregon that regularly make loans to Oregon borrowers in reliance on DIDMCA’s interest-rate exportation authority. According to the brief, Oregon’s interpretation of its DIDMCA opt-out threatens lending programs relied upon by financial institutions throughout the country.
The amici support the plaintiffs’ statutory arguments and emphasize that they are filing separately to expand upon those arguments and to highlight two broader policy considerations that, in their view, demonstrate why Oregon’s interpretation of DIDMCA cannot be reconciled with the statute.
“Loans Made In” a State Refers to the Bank’s Location, Not the Borrower’s
The centerpiece of the brief is its textual analysis of DIDMCA. The trade associations argue that Section 525 permits a state to opt out of DIDMCA’s preemption only with respect to loans “made in” that state. They contend that the phrase necessarily focuses on the state where the bank makes the loan, not on the location or residence of the borrower.
The brief argues that this reading is confirmed by several considerations:
- Section 521 itself ties permissible interest rates to the state “where the bank is located.”
- Congress borrowed the operative language in Section 521 from Section 85 of the National Bank Act.
- The Supreme Court’s decision in Marquette National Bank v. First of Omaha Service Corp. treated loans as being made where the bank conducts its lending operations, even when borrowers reside elsewhere.
- Numerous other provisions throughout the federal banking laws consistently use the phrase “make a loan” to describe the lender’s conduct, rather than the borrower’s.
- The legislative history of DIDMCA and its predecessor statutes demonstrates that Congress intended to preserve competitive equality between state-chartered and national banks while allowing states to regulate only their own institutions.
The amici also point out that the district court in the Colorado Weiser opt-out litigation adopted the same lender-focused interpretation. As the brief notes, the Tenth Circuit has scheduled en banc argument for August 18, 2026.
Oregon’s Interpretation Would Undermine the Dual Banking System
The brief devotes substantial attention to the broad consequences of Oregon’s position.
Congress enacted DIDMCA specifically to eliminate competitive disadvantages facing state-chartered banks while preserving the nation’s dual banking system. Oregon’s interpretation, they argue, would reverse that balance by allowing one state to regulate loans made by state banks chartered in other states while national banks would remain free to export their home states’ interest rates under Section 85 of the National Bank Act.
The trade associations contend that this would recreate precisely the competitive disparity DIDMCA was enacted to eliminate. If additional states adopted Oregon’s approach, the amici argue, many state-chartered banks could face increasing pressure to convert to national bank charters in order to avoid inconsistent state regulation, thereby weakening the dual banking system that Congress sought to preserve.
The brief also emphasizes what it views as Oregon’s unprecedented assertion of exterritorial authority. In particular, it notes that HB 4116 applies even to loans made by out-of-state state banks to Oregon borrowers who are not present in Oregon when the loan is made, so long as the borrower’s repayment is made through an Oregon financial institution.
Claimed Benefits to Consumers Are Also Questioned
The trade associations also challenge Oregon’s assertion that the legislation protects consumers.
First, they argue that consumer protection was not the purpose of DIDMCA’s opt-out provision. Rather, Congress included Section 525 to preserve state authority over banks chartered by the opting-out state.
Second, the amici argue that Oregon’s law will not eliminate higher-rate lending because national banks will continue to enjoy their own federal interest-rate exportation authority under the National Bank Act.
Finally, the brief cites economic research concluding that strict interest-rate caps frequently reduce credit availability for higher-risk borrowers while encouraging lenders to adopt alternative pricing mechanisms, such as higher annual fees. According to the amici, the likely result would be reduced competition, diminished access to credit, and potentially higher borrowing costs for many Oregon consumers.
Our Take
This filing demonstrates overwhelming industry support for the plaintiffs’ challenge. The participation of the ABA, BPI, CBA, and virtually every state bankers association demonstrates that the banking industry views the Oregon litigation as extending well beyond a dispute over one state’s lending law.
The brief also complements the amicus briefs filed by the Federal Deposit Insurance Corporation and Office of the Comptroller of the Currency, which both focused primarily on the statutory interpretation of DIDMCA and the preservation of competitive parity between state and national banks. By contrast, the trade associations devote considerably more attention to the practical consequences for the dual banking system and to the economic effects Oregon’s expanded opt-out would have on interstate lending and consumer credit markets.
Taken together with the amicus briefs submitted by the FDIC, OCC, and a coalition of 15 state attorneys general, the trade association brief highlights the broad range of governmental and industry stakeholders urging the district court to preliminarily enjoin enforcement of Oregon’s DIDMCA opt-out while the litigation proceeds.
Ballard Spahr represents the plaintiff trade associations in the Oregon case and the amici consortium of other trade associations in the Colorado case.