Twenty-One States File Amicus Brief Supporting Challenge To Colorado’s Effort To Regulate Interest Rates Charged By Out-of-State State Banks

The en banc proceedings in National Association of Industrial Bankers v. Weiser continue to attract significant attention. On June 4, 2026, the attorneys general of Utah and 20 other states filed an amicus brief urging the U.S. Court of Appeals for the Tenth Circuit to affirm the district court’s decision enjoining Colorado’s attempt to utilize its opt out pursuant to Section 525 of the Depository Institutions Deregulation and Monetary Control Act of 1980 (DIDMCA) as a basis to regulate the interest rates charged to Colorado borrowers by out -of-state state banks.

The amici states are Alabama, Arkansas, Florida, Georgia, Iowa, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Montana, Nebraska, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Texas, West Virginia, Wyoming, and Utah, which took the lead in preparing the brief.

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.

Focus on the Dual Banking System

The states’ brief is notable because it frames the dispute primarily as a threat to the nation’s dual banking system rather than merely a question of statutory interpretation.

According to the amici, DIDMCA was enacted to create competitive equality between national banks and state-chartered depository institutions by giving state banks the same interest rate authority as national banks, namely, the right to charge either home state interest rates or 1% above the Federal Reserve discount rate, whichever is higher. The amici emphasize that Congress expressly stated in Section 521 that DIDMCA was intended “to prevent discrimination against State-chartered insured banks.”

The states argue that Colorado’s interpretation of DIDMCA would undermine that congressional objective by subjecting state-chartered institutions to restrictions that do not apply to national banks.

Historical Meaning of “Loans Made in Such State”

The central issue before the en banc court is the meaning of Section 525’s opt-out language permitting a state to opt out with respect to “loans made in such State.”

The amici argue that, when Congress enacted DIDMCA in 1980, both banking law and longstanding judicial precedent understood a loan to be “made” where the lender is located, not where the borrower resides.

The brief relies heavily on Marquette, as well as nineteenth-century cases holding that loans originated by out-of-state lenders are governed by the law of the lender’s state. According to the amici, Congress legislated against this established background and therefore could not have intended the phrase “loans made in such State” to encompass every loan made to a resident of the opt-out state.

The states further contend that, at the time DIDMCA was enacted, interstate banking was extremely limited and the notion that one state would regulate a bank chartered and located entirely in another state was virtually unknown. As a result, they argue that Congress could not have intended DIDMCA’s opt-out provision to authorize the type of extraterritorial regulation Colorado seeks to impose.

Concerns About State Regulatory Authority

The brief also advances a practical argument that has received comparatively little attention in the litigation thus far.

The amici contend that allowing Colorado to regulate loans made by banks chartered in other states would interfere with those states’ ability to supervise and examine their own institutions.

The states explain that bank regulators routinely review loan portfolios and evaluate loan-loss reserves using their own state regulatory frameworks. If Colorado law applies whenever a borrower resides in Colorado, out-of-state regulators would be forced to account for Colorado-specific requirements when evaluating their institutions’ loan portfolios.

According to the amici, this would complicate examinations, increase regulatory uncertainty, and impair states’ ability to monitor the financial condition of their own banks.

The brief warns that such interference would affect not only regulators but also shareholders, depositors, and customers of state-chartered institutions.

Competitive Disparity Between State and National Banks

Perhaps the most significant policy argument advanced by the amici concerns competitive equality.

The states argue that Colorado’s law places state-chartered institutions at a competitive disadvantage because national banks remain protected by federal preemption and continue to enjoy unrestricted rate exportation authority under the National Bank Act.

Under Colorado’s interpretation, state-chartered institutions would be required to comply simultaneously with federal law, the law of their chartering state, and Colorado usury law whenever they lend to Colorado residents. National banks would face no comparable burden.

The amici contend that this disparity directly conflicts with DIDMCA’s purpose of preserving usury parity between state-chartered and federally chartered institutions.

They further argue that such a regime would create pressure for state-chartered banks to convert to national bank charters in order to avoid the additional regulatory burdens imposed by Colorado’s law. Because preserving the dual banking system was one of Congress’s principal objectives in enacting DIDMCA, the amici maintain that Colorado’s interpretation should be rejected.

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