DIDMCA opt-out
National Association of Industrial Bankers v. Weiser
Date: Dec. 16, 2025
Issue: Whether the Tenth Circuit should grant rehearing en banc in a case challenging Colorado’s rate opt-out law as violating the Depository Institutions Deregulation and Monetary Control Act of 1980 (DIDMCA).
Case Summary: The American Bankers Association filed a coalition amicus brief urging the Tenth Circuit to grant a rehearing en banc of a panel decision that reversed the District of Colorado’s preliminary injunction against Colorado’s 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 FDIC 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.
In a 2-1 decision, a Tenth Circuit panel reversed the preliminary injunction. Interpreting DIDMCA Section 525’s opt-out phrase, “loans made in such state,” the panel held that a loan is “made in” an opt-out state when either the lender or the borrower is located there. On December 9, 2025, the trade associations filed a petition for rehearing en banc. The trade associations argued that the decision creates a circuit split over where loans are “made” for federal preemption purposes and conflicts with Supreme Court and Tenth Circuit precedent by applying a presumption against preemption despite an express preemption provision.
On Dec. 16, 2025, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency filed amicus briefs supporting rehearing, arguing the panel decision misreads DIDMCA and upsets the balance Congress struck between state-chartered and national banks. The FDIC contends the decision misconstrues Section 525, threatens interest-rate parity, and risks widespread state opt-outs that would weaken the dual banking system and reduce consumer choice. The OCC likewise argues that separating Section 525 from Section 521 effectively eliminates rate exportation for state banks, injects uncertainty into interstate lending, leaves national banks unaffected by state opt-outs, and reintroduces the competitive inequality DIDMCA was designed to eliminate, with harmful consequences for credit access and modern interstate banking.
In its recent amicus brief, ABA argued that en banc review is warranted for several reasons. First, ABA argued that the panel misread Section 525’s text and context. ABA explained that Congress used the word “made” to mean the state where the lender performs the lending functions, not where a loan is merely executed, and that the panel erred by treating the two terms as interchangeable. The same Congress used the broader phrase “made or executed” in related National Housing Act statutes, showing it understood the difference and chose narrower language in Section 525. Under long-standing rules of statutory interpretation, courts must respect these differences in wording, which limit opt-out authority to the lender’s location and bar the panel’s broader reading.
Next, ABA highlighted DIDMCA’s legislative history to show Congress’s intent to preserve competitive equality. Congress enacted Sections 521–523 to place state-chartered banks on equal footing with national banks after strict state usury caps, such as Arkansas’s 10% limit championed by Sens. Mark Pryor and Dale Bumpers, left state banks unable to compete during high inflation. Congress granted state banks the same federal rate authority as national banks while allowing states, through Section 525, to reimpose limits only on loans made by their own institutions within their borders. ABA stressed that nothing in the legislative history suggests Congress meant to let states regulate interstate loans by out-of-state banks, a point reinforced by Judge Rossman’s dissent and by the fact that modern interstate state-bank lending emerged years after DIDMCA’s enactment.
Finally, ABA argued that the majority’s conclusion that a loan is “made” in the state where the borrower is located creates an unworkable morass. The rate opt-out law would require state-chartered banks to track a borrower’s physical location at each step of a transaction and apply varying interest rates on a transaction-by-transaction basis rather than at the account level. ABA stressed that modern banking, especially credit cards, online lending, phone transactions, recurring payments, and delayed approval, makes such tracking unrealistic and would produce a shifting patchwork of state rate limits, heavy compliance burdens, and conflict-of-laws problems. ABA warned that this approach defeats Congress’s goal of allowing state banks to charge a single home-state rate nationwide and echoes the Supreme Court’s caution in Marquette National Bank v. First of Omaha Service Corp. that transaction-based rules would throw interstate banking into confusion.
Bottom Line: The panel’s borrower-location test for when a loan is “made” conflicts with statutory text, legislative history, and precedent, creates a circuit split, and would impose unworkable burdens on interstate state-bank lending, thus warranting rehearing en banc.
Document: Brief
