On November 10, 2025, the US Court of Appeals for the 10th Circuit issued its opinion in National Association of Industrial Bankers v. Weiser, a closely watched case testing the boundaries of state authority over interest-rate caps for loans made by state-chartered banks over the internet. The decision, which reversed a district court injunction, allows Colorado to enforce its own limits on loans to Colorado residents – even if the loans are originated by state-chartered banks located elsewhere. Unless it is overturned, the 10th Circuit’s decision will significantly impact bank-fintech lending programs and banking as a service (BaaS) in Colorado, as well as other states that follow Colorado’s lead.
Case background
Colorado passed House Bill 1229 in June 2023 to cap certain loan charges and opt out of the Depository Institutions Deregulation and Monetary Control Act (DIDMCA). Under DIDMCA, state-chartered banks have parity with national banks and may apply their home-state interest rates nationwide; however, DIDMCA also includes a provision that allows states to opt out of that section of the statute, meaning they can pass laws to regulate interest rates on “loans made in such State.” The Colorado law relied on that language to apply interest rate restrictions to loans to Colorado residents, regardless of whether the loans were originated by out-of-state banks. In March 2024, trade groups sued, claiming a loan is “made” where the lender operates (generally, the bank’s home state), not where the borrower lives.
In June 2024, a federal judge temporarily blocked Colorado from enforcing its opt out against out-of-state banks. The district court agreed that the lender’s location and actions control where a loan is made, preventing Colorado from imposing its rate limits on non-Colorado banks while the case moved forward.
Majority opinion: Expanding state reach
The 10th Circuit held that Colorado’s DIDMCA opt out permits the state to apply its own interest-rate limits to loans “made in” Colorado – even when the lender is a state-chartered, FDIC-insured bank located elsewhere. Interpreting the statutory phrase “loans made in such State,” the court concluded that a loan is “made in” an opt-out state if either the borrower or the lender is located there.
The panel relied on the plain text of Section 525 of DIDMCA and the statute’s structure. It reasoned that Congress intentionally gave states the power to reimpose their usury limits for loans connected to their jurisdictions, even at the expense of uniformity. While acknowledging that this interpretation could lead to a patchwork of conflicting state laws, the majority noted that Congress was aware of this possibility when it enacted the opt-out mechanism and chose to accept it.
Dissent: Warning of regulatory instability and systemic risks
Judge Veronica S. Rossman, concurring in part and dissenting in part, sounded a strong note of caution – one that closely tracked the policy arguments advanced in the amicus briefs of all 50 state bankers associations and the American Bankers Association. The dissent argued that the majority’s interpretation threatens the stability and competitive balance of the nation’s dual banking system, which relies on parity between state and national banks. In particular:
- Patchwork regulation: The dissent warned that allowing states to reach across borders would create a confusing and burdensome patchwork of overlapping state laws, increasing compliance costs and legal uncertainty for banks and fintechs operating nationally.
- Dual banking system at risk: The dissent highlighted the risk that expansive opt outs would incentivize banks to abandon state charters in favor of national charters (because the National Bank Act has no equivalent opt out), undermining the dual banking system’s benefits of regulatory diversity, competition and innovation.
- Credit access and innovation: The dissent noted that state-chartered banks, especially those partnering with fintechs, have played a key role in expanding access to credit for underserved populations. Subjecting these banks to conflicting state laws could chill innovation and disproportionately affect consumers and small businesses in “banking deserts” or with limited credit histories.
- Congressional intent and historical context: The dissent noted that at the time of DIDMCA’s enactment, Congress did not envision interstate lending by state banks as it exists today. The opt-out provision was meant to allow states to cap rates on loans made by banks physically located within their borders – not to regulate out-of-state banks’ activities.
Implications of the decision
The 10th Circuit’s decision marks a significant expansion of state regulatory authority over digital, interstate lending and deepens the tension between state consumer protection and uniformity in interstate banking. If other states follow Colorado’s lead, banks could face a complex web of overlapping and conflicting interest rate laws, raising compliance costs and legal uncertainty, and ultimately discouraging banks from lending to Colorado residents.
The ruling also is likely to spur further litigation, including a certiorari petition to the US Supreme Court and calls for congressional clarification of DIDMCA’s opt-out provision.
For state-chartered banks and fintechs in bank partnerships and lending to Colorado residents – and potentially those in future opt-out states – the decision significantly changes regulatory considerations. It may also accelerate the trend toward national bank charters, with potential consequences for competition, innovation and credit access. As more states consider similar opt outs, the pressure for federal legislative or regulatory action will only grow.