DIDMCA OPT-OUT
National Association of Industrial Bankers v. Weiser
Date: Nov. 10, 2025
Issue: Whether Colorado’s “rate opt-out law” violates the Depository Institutions Deregulation and Monetary Control Act of 1980 (DIDMCA).
Case Summary: In a 2-1 decision, a Tenth Circuit panel reversed the District Court of Colorado’s preliminary injunction, which prevented Colorado from enforcing its “rate opt-out law.”
DIDMCA authorized state-chartered banks to charge interest at a rate permissible in the state “where the bank is located.” At the same time, Congress allowed states to “opt-out” from the preemptive effect of this provision, in part, by enacting a law that “states explicitly and by its terms that such State does not want this section to apply with respect to loans made in such State.”
In 2023, Colorado enacted HB1229 to add Colo. Rev. Stat. § 5-13-106 and exercise this opt-out authority. Several trade associations sued for a declaratory judgment that the opt-out did not impact the rates at which their state-chartered bank members located outside of Colorado could charge Colorado residents. They moved for a preliminary injunction, which the district court granted in June 2024. The court determined that, under Section 525 of DIDMCA, a loan is made where the lender is located and where the lender performs loan-making functions. The court reasoned the borrower’s location (in Colorado) does not determine where a loan is made. Colorado appealed the district court’s decision.
On appeal, the Federal Deposit Insurance Corporation filed its amicus brief supporting Colorado, arguing the district court’s interpretation conflicts with DIDMCA’s text, structure, purpose, and history. In response, ABA filed a coalition amicus brief urging the Tenth Circuit to affirm the preliminary injunction. ABA argued, among other things, that DIDMCA’s legislative history supports the district court’s conclusion that where a loan is made under Section 525 of DIDMCA depends on where the lender is located and where the lender performs loan-making functions.
However, the panel reversed the preliminary injunction. Writing for the majority, Judge Gregory Phillips ruled the Plaintiffs’ claims were unlikely to succeed on the merits. The majority held that the statutory phrase “loans made in such State” encompassed loans made to Colorado residents, even if the bank making the loan was not located in Colorado. The majority rejected the district court’s view that the person “making” a loan is the lender, not the borrower, and held instead that a loan “made” in the state includes any loan “executed” in the state. Reading Section 1831d of the Federal Deposit Insurance Act’s opt-out language within its express preemption scheme, the majority stressed that Congress allowed states to reclaim their historic control over usury and consumer-protection laws once they opt out.
The majority also declined to give any deference to earlier FDIC interpretations of the rate opt-out provision: it did not need agency guidance because the statute’s text and purpose already resolved the issue. The majority added that, even if it considered those interpretations, it would still give them little weight, as the FDIC and the former Office of Thrift Supervision had conflicting positions over the years. Moreover, none of these interpretations came through formal rulemaking, which further reduced their persuasive value, according to the majority.
The majority also concluded the balance of equities and the public interest supported reversing the preliminary injunction. The majority explained that the district court misapplied these factors because it relied on the mistaken belief that Section 1831d preempted Colorado’s interest-rate caps. The majority reaffirmed that Colorado could legally enforce those caps after opting out, and thus Plaintiffs’ alleged harms did not outweigh the state’s interests.
Judge Veronica Rossman concurred in part and dissented in part. Judge Rossman agreed Plaintiffs stated a viable cause of action but declined to join the remainder of the majority’s opinion because she believed the majority misinterpreted Section 1831d and its opt-out provision. In her view, the statutory text, structure, and history show that a loan is “made” only where the lending bank is located or performs its loan-making functions, not where the borrower resides, so Colorado exceeded its authority by seeking to regulate interest rates charged by out-of-state banks.
Bottom Line: The Tenth Circuit’s ruling means Colorado’s opt-out from Section 27 strips out-of-state banks of their usual ability to “export” their home-state interest rates to Colorado borrowers and instead requires them to comply with Colorado usury ceilings.
Document: Opinion
