Colorado Files Supplemental En Banc Brief Defending Its Interpretation Of DIDMCA’s Opt-Out Provision

Colorado has filed its supplemental en banc brief in National Association of Industrial Bankers, et al. v. Weiser, urging the U.S. Court of Appeals for the Tenth Circuit to affirm the now-vacated panel majority’s interpretation of Section 525 of the Depository Institutions Deregulation and Monetary Control Act of 1980 (DIDMCA). The supplemental brief responds to questions posed by the en banc court and to the Supplemental En Banc Brief filed by the plaintiffs and the amicus briefs supporting them (which includes the amicus brief filed by our firm on behalf of several national and state bank trade associations) and reiterates Colorado’s position that a state’s DIDMCA opt-out applies whenever either the borrower or the lender is located in the opt-out state.

The central issue before the en banc court is the meaning of the phrase “loans made in such State” in DIDMCA Section 525. Colorado argues that the statutory text unambiguously encompasses loans involving either a borrower or a lender located in an opt-out state, while the plaintiffs contend that a loan is “made” only where the bank is located and performs its lending functions.

Colorado’s Principal Arguments

The Statutory Text Is Unambiguous

Colorado begins with what it characterizes as a straightforward textual analysis. According to the State, a loan cannot exist without both a borrower and a lender. Because a loan is completed only when the lender delivers funds and the borrower receives them and agrees to repay them, both parties necessarily determine where a loan is “made.” Colorado therefore argues that the Banks’ assertion that “the borrower is irrelevant” is inconsistent with the ordinary meaning of the statutory language.

The brief relies heavily on contemporaneous dictionary definitions and traditional contract principles, emphasizing that a loan is a bilateral transaction requiring actions by both parties. According to Colorado, because both the borrower and lender are necessary for a loan to come into existence, both parties’ locations are relevant in determining whether a loan was “made” in an opt-out state.

Congress Used Different Language in Sections 521 and 525

Colorado next argues that Congress deliberately used different language in DIDMCA’s two key provisions.

Section 521 authorizes state-chartered banks to charge interest permitted by the laws of the state “where the bank is located.” By contrast, Section 525 allows a state to opt out with respect to “loans made in such State.”

According to Colorado, courts must give meaning to Congress’s choice of different language. Had Congress intended Section 525 to focus solely on the bank’s location, it could easily have repeated the language used in Section 521. Instead, Congress chose a different phrase, which Colorado argues necessarily has a broader meaning.

The Banks’ Interpretation Produces an Illusory Opt-Out

Colorado argues that the plaintiffs’ interpretation would effectively deprive Section 525 of meaningful effect.

Under the Banks’ interpretation, Colorado argues, the state’s opt-out would prevent only Colorado-chartered banks from exporting interest rates while allowing out-of-state state-chartered banks to continue making loans to Colorado residents at rates permitted by their home states. Colorado contends that Congress could not have intended such a limited opt-out because it would leave states powerless to reestablish meaningful usury protections for their own residents.

The brief includes several hypothetical examples illustrating how Colorado’s interpretation gives full effect to both Sections 521 and 525, while the Banks’ interpretation largely nullifies the opt-out provision.

Practical Compliance Concerns Do Not Justify Rewriting the Statute

Responding to arguments that its interpretation would complicate nationwide lending, Colorado argues that any additional complexity is simply the consequence of Congress allowing individual states to opt out of DIDMCA.

The State contends that lenders routinely comply with differing state laws in other contexts and identifies a straightforward analytical framework for determining whether a state’s opt-out applies: first, determine whether either the borrower or lender is located in an opt-out state; second, determine whether the loan falls within the scope of that state’s opt-out; and third, determine which state’s substantive law governs the transaction. According to Colorado, these issues are manageable and do not justify departing from the statute’s plain language.

Alternative Arguments if the Court Finds Ambiguity

Although Colorado maintains that the statute is unambiguous, it also argues that every traditional interpretive aid favors its position if the Court concludes otherwise.

First, Colorado contends that DIDMCA’s legislative history demonstrates Congress intended states to retain the ability to reimpose their usury laws through the Section 525 opt-out. The brief relies heavily on statements by Senator William Proxmire, who described the opt-out provision as preserving state authority to restore interest-rate limitations if a state chose to do so.

Second, Colorado argues that the regulatory history provides little support for the Banks’ interpretation because federal agencies have repeatedly changed their views over the past four decades. The State notes that the FDIC’s 1988 interpretive letter expressly rejected the proposition that a loan necessarily is made only where the bank is located and instead emphasized that Sections 521 and 525 use materially different language serving different purposes.

Finally, Colorado argues that if ambiguity remains after applying traditional interpretive tools, the Court should apply the presumption against federal preemption and construe the statute in favor of preserving state regulatory authority.

Observations

Colorado’s supplemental brief demonstrates that the en banc proceeding has evolved into a pure exercise in statutory interpretation. Unlike earlier briefing, which devoted significant attention to policy considerations, Colorado now grounds virtually its entire argument in textual analysis. The State repeatedly emphasizes that Congress used different language in Sections 521 and 525 and argues that those differences must be given independent meaning.

The brief also seeks to reframe the case as one involving federalism rather than bank parity. While the plaintiffs argue that Congress enacted DIDMCA principally to place state-chartered banks on equal footing with national banks, Colorado contends that Section 525 reflects Congress’s equally important decision to preserve state sovereignty by permitting states to reject DIDMCA’s interest-rate exportation regime.

The en banc court’s ultimate interpretation of the phrase “loans made in such State” will have significant implications for interstate lending by state-chartered banks and for the continuing viability of state efforts to regulate interest rates applicable to loans made to their residents.

Any amicus briefs supporting the State of Colorado are due on July 15, 2026. Plaintiffs Supplemental En Banc Reply Brief is due July 22. The En Banc oral argument will take place on August 18, 2026.

Three leading financial services trade associations (the National Association of Industrial Bankers (NAIB), the Online Lenders Alliance (OLA), and the American Financial Services Association (AFSA)) filed a lawsuit on June 15, 2026 in Federal District Court in the District of Oregon challenging a recently enacted Oregon law effective June 5, 2026, that seeks to impose Oregon’s 36% interest-rate cap on consumer finance loans made by out-of-state state-chartered banks in their home states to Oregon residents.

The lawsuit contends that Oregon House Bill is preempted by Section 521 of DIDMCA and, in part, violates the dormant Commerce Clause of the U.S. Constitution.

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