Minnesota lawmakers imposed strong limits on payday lenders last session, capping interest rates at 33% for loans between $350 and $1,000, and even lower for smaller loans — but a federal law allows banks based in other states to offer short-term loans with triple-digit interest rates.

A bill in the Legislature could close the loophole by opting Minnesota out of a provision in federal law that allows state-chartered, federally insured banks to offer loans at the interest rates allowed in their home state, rather than the state where the loan is issued.