National Association Of Industrial Bankers v. Weiser: Implications Of The Tenth Circuit's Ruling That Colorado Interest Rate Limits Apply To Loans Made By State Banks Located Outside Colorado– Join Our Webinar (See Link Below)

On November 10, 2025, the U.S. Court of Appeals for the Tenth Circuit, in a 2–1 decision, issued its opinion in National Association of Industrial Bankers et al. v. Weiser.

In resolving what it described as "an issue of first impression," the court held that Section 27 of the Federal Deposit Insurance Act (FDIA) does not preempt the interest rate limitations imposed on state banks by a state that has elected to exercise its right under Section 525 of the Depository Institutions Deregulation and Monetary Control Act of 1980 (DIDMCA) to opt-out of Section 27 with respect to "loans made in such State." Section 27 of the FDIA confers on a state bank the same usury authority national banks possess under Section 85 of the National Bank Act to "export" the interest rate allowed by the bank's home state to borrowers residing throughout the United States.

In 2023, Colorado enacted a statute that opted out of Section 27. The District Court ruled that the Colorado interest rate limits were nonetheless preempted as to loans made by state banks located outside Colorado. It enjoined the statute's enforcement. The Court of Appeals reversed. The Court ruled that "'loans made in such State' refers to loans in which either the lender or the borrower is located in the opt-out state. Because Colorado has opted out of [Section 27 of the FDIA], that statute no longer preempts Colorado's interest-rate caps for loans from out-of-state banks to Colorado borrowers."

The case presents an important federal statutory construction question of first impression: what does "loans made in such State" mean for purposes of a state's opt-out? Although the case does not apply to national banks, who may continue to extend credit to Colorado residents and ignore Colorado's usury laws, the Tenth Circuit's decision has profound consequences for interstate lending to residents of opt-out states by state banks (including non-bank Fintechs with whom they partner).

Majority and Dissent

The majority opinion adopted an expansive reading of "loans made in such State" that will encompass all state banks' loans to Colorado residents, even when the lender's key activities occur outside Colorado. The court concluded that Congress intended to preserve significant state power to regulate all loans made to their residents, notwithstanding federal rate preemption granted under Section 27.

In a well-reasoned dissent, Judge Rossman argued that the majority's construction conflicts with the statutory text, history, and purpose of Section 525, which she read as limiting state opt-outs to intrastate loans originated by banks located within the state. The dissent warned that the majority's approach undermines the uniformity and usury parity between state and national banks that Congress sought in 1980 and will result in regulatory fragmentation across states.

The dissenting opinion cited and quoted approvingly from the amicus brief we submitted on behalf of the American Bankers Association, Consumer Bankers Association and Bank Policy Institute.

The Court of Appeals has granted plaintiffs' unopposed request for 15-day extension to file a rehearing petition. The rehearing petition is due Dec. 9, and amicus briefs in support of rehearing are due Dec.16. Rehearing grants require a majority of active (i.e., non-senior) judges.

The mandate will be stayed at least until the Court renders its decision on the rehearing petition. Until the mandate is issued, the Colorado Attorney General is still bound by the District Court's injunction precluding the Attorney General from enforcing Colorado's usury laws against out-of-state, state-chartered banks.

Implications of 10th Circuit Opinion

The most significant fallout from the opinion is the possibility that other states may enact opt-out legislation similar to the statute which Colorado enacted. (Iowa and Puerto Rico enacted similar opt-out statutes years ago.) The biggest risk of that happening is in the following jurisdictions where opt-out legislation has been introduced previously—Maryland, Nevada, Minnesota, Rhode Island and the District of Columbia.

Other states which are high risk for introducing opt-out legislation are those with Democratic governors in which both houses of the legislature are also controlled by the Democrats (sometimes referred to as the "Democratic Trifecta") and also have not deregulated their usury ceilings. There are about ten additional states that fall into that category and include populous states like California, New York, New Jersey and Massachusetts.

If the mandate is issued, then some lenders may want to consider converting their charters from state to national bank charters. Fintechs partnering with state banks may want to consider partnering with national banks for purposes of making loans to Colorado residents. Of course, another option is not to lend to Colorado residents or to reduce the interest rate on extensions of credit to that which is permitted by Colorado usury laws.

There are lots of other questions which we will answer during our upcoming webinar. Our Consumer Financial Group (which has a large office in Colorado) has been counseling many state banks and Fintechs on a wide range of issues pertaining to the Colorado situation.

Webinar—December 16, 2025

Our panel of experts will analyze the decision and explore its practical consequences.

Moderator

Alan S. Kaplinsky, Senior Counsel, Founder and Former Chair of Consumer Financial Services Group, Ballard Spahr LLP

Panelists

Andrew Kushner, Senior Policy Counsel, Center for Responsible lending

Burt M. Rublin, Senior Counsel, Consumer Financial Services Group, Ballard Spahr LLP

John L. Culhane, Partner, Consumer Financial Services Group, Ballard Spahr LLP

Ronald R. Vaske, Partner, Consumer Financial Services Group, Ballard Spahr LLP

Joseph J. Schuster, Partner, Consumer Financial Services Group, Ballard Spahr LLP

This program is anticipated to be approved for 1.5 CLE credits in CA, NV, NY, & PA; and 1.8 NJ. Uniform Certificates of Attendance will also be provided for the purpose of seeking credit in other jurisdictions.

12:00 PM ET

11:45 AM – 12:00 PM | Log in
12:00 PM – 1:30 PM | Program

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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.