ARLINGTON, Va. (June 20, 2024)—After a federal judge temporarily stopped Colorado from opting out of the 1980 Depository Institutions Deregulation and Monetary Control Act (DIDMCA) under state legislation passed and signed into law last year, Online Lenders Alliance Chief Executive Officer Andrew Duke issued the following statement:
“This court decision, while temporary, is a win for consumers. Colorado’s legislation opting out of DIDMCA is misguided on many levels: it undermines our nation’s dual banking system; it pushes the banking industry in Colorado back to a regulatory regime that we abandoned for good reason almost 50 years ago; and it undermines the role that technology and innovation have made in expanding bank credit offerings and options for consumers who need and benefit from them.
Opting out of DIDMCA ultimately reduces access to credit and leaves consumers worse off. By losing access to credit options, Colorado consumers would suffer most of the consequences of this misguided legislation. This temporary legal relief is welcome, and it is our hope that the court will side with the best interests of Coloradans who rely on access to credit to manage their financial wellbeing.”
Last year, the Colorado Legislature passed, and Governor Jared Polis signed into law, HB23-1229, legislation that opts Colorado out of the 1980 DIDMCA law. If implemented, it could severely restrict out of state banks from being able to issue loans above Colorado’s restrictive rate caps, even when otherwise legal to do so under DIDMCA’s legal provisions.
By opting out of DIDMCA, Colorado would have effectively stopped innovative financial technology companies from partnering with banks to offer dynamic and responsible financial products to the consumers who rely on them.
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