Iowa Targets Out-of-State Bank Partner for Usury, Shedding Light on State’s Interpretation of DIDMCA Opt-Out

State-chartered banks lending to Iowa residents will want to take note of an Assurance of Discontinuance entered into in December between the State of Iowa and an out-of-state bank to settle claims that the bank charged usurious rates of interest to Iowa consumers. The settlement also highlights the Iowa Attorney General’s interpretation of the state’s opt-out from the federal Depository Institutions Deregulation and Monetary Control Act of 1980 (DIDMCA) — with the potential to impact loan eligibility parameters and enforcement risk for state-chartered banks and programs doing business in Iowa.

Mayer Brown’s Legal Update provides further detail.