SALEM — A car title lender has challenged a new Oregon law capping annual interest rates on consumer loans at 36 percent.

SALEM — A car title lender has challenged a new Oregon law capping annual interest rates on consumer loans at 36 percent.

Northwestern Title Loans of Georgia, which operates 17 stores in Oregon, will ask a Marion County Circuit judge Friday to temporarily prevent the law from going into effect July 1. The company hopes a court eventually will throw out the law.

The suit names the state and the Department of Consumer and Business Services. Cory Streisinger, department director, said it would fight the lawsuit.

Supporters of the law argue that car title and payday lenders trap vulnerable low-income residents in cycles of debt by charging triple-digit interest rates.

Car title lenders make small loans using car titles as collateral and commonly charge more than 300 percent annual interest.

The law limits interest rates to 30 percentage points above the Federal Reserve discount rate, now at 6.25 percent, on consumer loans less than $50,000.

Northwestern argues that the law violates the Oregon Constitution's "guarantee of equal protection" because the interest rate cap applies only to consumer lenders and not to state banks and credit unions.