In 2023, Colorado opted out of the Depository Institutions Deregulation and Monetary Control Act of 1980 (DIDA). Section 1831(d) of DIDA allows a state bank to charge the greater of the rate allowed for state banks or the discount-plus-one rate on loans. DIDA also provides that state interest-rate caps do not apply to state-chartered banks unless a state has chosen to opt-out of its provisions, allowing the state to enforce its own interest-rate caps on loans that are made to its borrowers. In 2023, Colorado opted out and applied this opt-out to out-of-state banks that made loans to Colorado borrowers. Certain trade associations sued, seeking an injunction, arguing that the opt-out from the law applied only to lenders located in Colorado. The district court entered an injunction, and the state agency appealed, arguing that the opt-out applies when either the borrower or the lender is located in Colorado.
In Nat'l Ass'n of Indus. Bankers v. Weiser, No. 24-1293, 2025 WL 3140623, 2025 U.S. App. LEXIS 29512 (10th Cir. Nov. 10, 2025) (opinion not yet released for publication), the Tenth Circuit Court of Appeals held that DIDA should be construed broadly to have the opt-out apply when either the borrower or the lending institution is located in Colorado. In so doing, it focused on the phrase “loans made in such state” and, particularly, on the words “made in” and “loans” in section 1831(d) of the act. In addition to looking to the plain english of the statute, the court looked at how those words were used in other parts of the federal banking laws. To buttress its decision, it also looked to the purpose of the statute and other (non-controlling) case law. In concluding, the appellate court decided that the district court had abused its discretion in entering the injunction, and remanded the case.
By: The Editorial Staff