Plaintiffs’ Reply Brief Urges Tenth Circuit To Preserve Preliminary Injunction Against Colorado’s DIDMCA Opt-Out Law

As we have previously reported, the en banc Tenth Circuit is considering National Association of Industrial Bankers v. Weiser, the closely watched case involving Colorado’s effort to use Section 525 of the Depository Institutions Deregulation and Monetary Control Act of 1980 (“DIDMCA”) to apply its interest-rate caps to loans made by out-of-state, state-chartered banks to Colorado borrowers.

Following the court’s request for supplemental briefing, the plaintiffs-appellees, the National Association of Industrial Bankers and other two industry trade associations, have now filed their reply brief responding to Colorado’s supplemental submission. The reply brief doubles down on what has been the plaintiffs’ central theme throughout the litigation: Section 525 permits a state to opt out of DIDMCA only with respect to loans made by state banks located within that state, not loans made by state banks located elsewhere.

The Core Issue Remains: Where Is a Loan “Made”?

According to the plaintiffs, Colorado’s interpretation depends upon giving the phrase “loans made in such State” a meaning entirely different from the identical concept used elsewhere in DIDMCA and throughout federal banking law.

The brief argues that Section 521 authorizes a state-chartered bank to charge the interest rate permitted by the laws of the state “where the bank is located.” Section 525, the plaintiffs contend, merely allows a state to reject that federal parity regime for loans made by its own state-chartered banks. It does not authorize an opt-out state to regulate loans made by state banks chartered in other states.

The plaintiffs maintain that reading Sections 521 and 525 together leads to only one conclusion: a loan is “made” where the lending bank performs its lending functions, not wherever the borrower happens to reside or sign loan documents.

Colorado’s Reading Creates an Internal Contradiction

The reply brief argues that Colorado improperly divorces Section 525 from the very statutory provision it modifies.

According to the plaintiffs, Colorado asks the court to interpret “loans made” one way in Section 521 (where the bank is located), but an entirely different way in Section 525 (where the borrower resides or executes the loan documents).

The plaintiffs argue that Congress would not have used the same concept in adjoining provisions to mean two different things absent a clear indication that it intended to do so.

The brief also points to Congress’s use of different language in the National Housing Act, enacted only three months before DIDMCA. There, Congress referred to loans “made or executed” in a state. The plaintiffs argue that this demonstrates Congress knew how to focus on the borrower’s location when it wished to do so but deliberately chose not to use that language in Section 525.

Marquette and Longstanding Banking Law

The reply brief relies heavily on the Supreme Court’s decision in Marquette National Bank v. First of Omaha Service Corp., arguing that interstate lending has long been understood to occur at the location of the lending bank even when borrowers obtain credit remotely.

The plaintiffs contend that nothing in DIDMCA altered that understanding.

They also argue that numerous federal banking statutes consistently use the terms “make” or “made” to describe the lender’s conduct rather than that of the borrowers.

Competitive Parity Is a Central Theme

Perhaps the most significant policy argument advanced in the reply brief concerns competitive parity.

The plaintiffs note that Colorado concedes it cannot regulate interest rates charged by out-of-state national banks because of Section 85 of the National Bank Act.

If Colorado’s interpretation of Section 525 were accepted, however, only out-of-state state-chartered banks would lose the ability to export their home-state interest rates into Colorado, while national banks would remain unaffected.

According to the plaintiffs, this would destroy one of DIDMCA’s principal objectives—placing state-chartered banks on equal competitive footing with national banks, which is expressly set forth in the language of Section 521.

The brief repeatedly characterizes Colorado’s interpretation as creating discrimination against out-of-state state banks while leaving national banks untouched.

Legislative History

The plaintiffs also return to the legislative history discussed in their earlier briefs.

They argue that Section 525 was modeled almost verbatim on earlier federal opt-out provisions that were designed to address federalism concerns by allowing states to continue regulating the interest rates charged by their own state-chartered banks.

In their view, nothing in the legislative history suggests Congress intended Section 525 to authorize one state to regulate banks chartered by another state.

Rather, they argue that the opt-out provision was intended simply to permit each state to decide whether its own banks would receive the benefits of DIDMCA’s federal interest-rate provisions.

Regulatory Guidance

The plaintiffs also emphasize that federal banking regulators have long interpreted Section 525 as focusing on where the bank makes the loan rather than where the borrower resides.

The brief cites FDIC and former Office of Thrift Supervision interpretive letters dating back to the early 1980s, as well as the FDIC’s amicus brief in Greenwood Trust, all of which concluded that a state’s DIDMCA opt-out does not affect loans made by out-of-state banks merely because the borrower resides in the opt-out state.

The plaintiffs acknowledge an FDIC interpretive letter issued in 1988, but argue that Colorado overreads it. According to the plaintiffs, the 1988 letter merely recognized that determining where a loan is made may require a functional factual analysis in unusual circumstances; it did not endorse the proposition that every loan is made wherever the borrower is located.

Our Observations

The plaintiffs’ reply brief presents a cohesive textual argument that Section 525 cannot be read in isolation from Section 521 and that the phrase “loans made in such State” must carry the same meaning throughout DIDMCA.

Particularly noteworthy is the emphasis on competitive parity. The plaintiffs repeatedly argue that Colorado’s interpretation would produce the anomalous result that out-of-state national banks could continue exporting their home-state interest rates into Colorado, while similarly situated out-of-state state-chartered banks could not. That, they contend, is precisely the competitive imbalance DIDMCA was enacted to eliminate.

The reply brief also attempts to neutralize Colorado’s reliance on consumer-protection policy. The plaintiffs maintain that whatever the merits of Colorado’s policy objectives, those concerns cannot override the statutory text adopted by Congress. In their view, Section 525 was designed to preserve state authority over a state’s own chartered institutions, not to allow one state to regulate the lending activities of state banks chartered elsewhere.

The en banc court therefore faces two sharply competing visions of Section 525. Colorado and its supporting amici argue that the statute confers broad state authority to protect resident borrowers from high-cost loans made by out-of-state state-chartered banks. The plaintiffs, supported by numerous banking industry amici and by the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency, argue that Congress adopted a lender-location rule that preserves competitive parity between state and national banks while limiting each state’s usury authority to its own chartered institutions.

The en banc court’s resolution of that disagreement will become the most important interpretation of DIDMCA’s Section 525 since the statute’s enactment in 1980, with significant implications for interstate lending and bank-fintech partnerships nationwide.

With the filing of plaintiffs’ reply brief, the briefing is now complete. Oral argument before the en banc Court will take place on August 18, 2026.