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On June 4, 2026, the Federal Deposit Insurance Corporation (FDIC) filed an amicus brief in the en banc proceedings pending before the U.S. Court of Appeals for the Tenth Circuit in National Association of Industrial Bankers v. Weiser, strongly supporting the plaintiffs-appellees’ challenge to Colorado’s attempt to apply its usury laws to loans made by out-of-state, state-chartered banks.
We recently blogged about an amicus brief we submitted on behalf of a consortium of national and state trade associations of financial institutions in the same case. Our amicus brief describes the issue pending before the Tenth Circuit and the status of it.
A Significant Reversal by the FDIC
The filing is notable because the FDIC previously submitted amicus briefs in the District Court and Tenth Circuit in this litigation taking a different position. That occurred during the Biden Administration when the FDIC was under different leadership. The agency expressly acknowledges that it withdrew its earlier brief in the Tenth Circuit before the oral argument because it no longer believes that position reflected the best reading of the statute and because it was inconsistent with the agency’s historical approach to determining where a loan is made for purposes of Section 525 of DIDMCA.
That reversal significantly strengthens the position of the banking industry plaintiffs, which are the National Association of Industrial Bankers, the American Financial Services Association, and the American Fintech Council. A copy of the plaintiffs’ supplemental brief in the Tenth Circuit is linked here.
FDIC Emphasizes Competitive Equality Between State and National Banks
The FDIC grounds its argument in the long-standing Congressional objective of maintaining competitive equality between state-chartered banks and national banks. Indeed, the preamble to Section 521 expressly states that it was enacted “[i]n order to prevent discrimination against State-chartered insured banks…with respect to interest rates.” The agency explains that Section 521 was enacted to ensure that state-chartered banks enjoy the same federal interest rate and exportation authority that national banks possess. According to the FDIC, allowing Colorado to dictate the interest rates that out-of-state state banks may charge Colorado borrowers would “radically alter” that Congressional framework.
The FDIC further argues that Colorado’s interpretation would undermine the dual banking system by imposing substantial operational and financial burdens on state-chartered institutions seeking to lend across state lines. Such an interpretation, the agency contends, would frustrate Congress’s purpose of preserving competition between state and national banks.
The FDIC Rejects a Borrower-Focused Test
The brief repeatedly emphasizes that the statutory phrase “loans made in such State” should be interpreted from the perspective of the lender rather than the borrower.
The FDIC notes that ordinary usage focuses on the lender’s actions when discussing who “makes” a loan. Borrowers do not ordinarily describe themselves as making loans; rather, banks make loans and borrowers receive or obtain them. The agency also points out that other provisions of DIDMCA similarly focus on the lender and its location rather than the borrower’s residence.
According to the FDIC, limiting a state’s opt-out authority to loans made by banks located in that state is consistent with Congress’s intent. Section 525 was designed to allow a state to restore its own usury regime if it wished, not to permit one state to regulate lending activity conducted by banks located in other states.
Federalism Concerns Cut Against Colorado’s Position
One of the most important aspects of the FDIC’s brief is its federalism analysis.
Colorado has argued that its interpretation protects state sovereignty by allowing Colorado to regulate lending to its residents. The FDIC responds that Colorado’s interpretation would actually interfere with the sovereignty of other states that have chosen not to opt out of DIDMCA’s interest-rate exportation regime.
The agency argues that Colorado’s borrower-focused approach would effectively permit one state to override the policy choices made by other states and would allow Colorado to dictate the lending terms available to banks chartered elsewhere. According to the FDIC, that result would not promote federalism but instead would undermine it.
Historical FDIC Guidance Supports the Industry’s Position
The FDIC also relies heavily on its historical interpretations of Section 525 of DIDMCA.
The agency cites its 1983 interpretive letter stating that a state-chartered bank could rely on the interest-rate authority of the state where the bank is located when extending credit to residents of other states, including states that had opted out of federal preemption.
The brief further cites a prior FDIC amicus filing in the Greenwood Trust litigation in 1992 in which the agency stated that a state opting out of Section 521 does not obtain extraterritorial authority over loans made by banks chartered in other states merely because the borrower resides in the opt-out state. (Ballard Spahr lawyers Burt Rublin and Alan Kaplinsky represented Greenwood Trust Company (which later changed its name to Discover Bank) in that litigation.)
Although Colorado has relied on an FDIC interpretive letter issued in 1988, the FDIC argues that the letter does not support Colorado’s position because it expressly stated that the borrower’s location is not controlling.
Where Is a Loan Made?
The FDIC’s brief identifies the same factors it has historically used to determine where a bank makes a loan for purposes of Section 521.
According to the agency, the relevant inquiry focuses on where the bank is located or where it performs key non-ministerial lending functions, including:
- Final loan approval;
- Communication of the final credit decision; and
- Disbursement of loan proceeds.
The borrower’s location, standing alone, is irrelevant. Instead, the location of the bank or where the bank performs its core lending activities provides the appropriate basis for determining where a loan is made.
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