Unprecedented Coalition of Amici Objects to Colorado’s Position in Interstate Banking Case in the 10th Circuit
Unprecedented Coalition of Amici Objects to Colorado’s Position in Interstate Banking Case in the 10th Circuit
Strong Support for Longstanding Rules of Interstate Banking under DIDMCA
A remarkably broad coalition spanning federal regulators, state attorneys general, banks, credit unions, fintech companies, consumer lenders, businesses and academics filed amici briefs in National Association of Industrial Bankers, et al v. Weiser, et al supporting the position taken by the National Association of Industrial Bankers (NAIB), the American Financial Services Association (AFSA), and the American Fintech Council (AFC) and opposing the position taken by Colorado.
These amicus briefs challenge Colorado's contention that it has authority to remove the essential protections of the federal Depository Institutions Deregulation and Monetary Control Act (DIDMCA) for state banks outside of Colorado, showing how this position is a dangerous outlier that jeopardizes the entire interstate banking system.
The 10th Circuit Court of Appeals will reconsider the matter in a full en banc rehearing on August 18.
The broad coalition of government agencies, organizations, and individuals signing briefs in support of the plaintiffs include:
Highlights From Amici Filings in Support of the Plaintiffs’ Position
“Congress could not have contemplated much less intended, that section 525’s opt out provision could be used by a state like Colorado to regulate an out-of-state bank with no branch in Colorado based solely on the fact that a Colorado state resident borrowed from that out-of-state bank. Such purported regulation is literally unprecedented.”
Attorneys General from Utah and 20 Other States
Colorado’s view “would create an unworkable morass for state-chartered depository institutions.”
American Bankers Association, Bank Policy Institute, Consumer Bankers Association, America’s Credit Unions, and 52 State Bankers Associations
“If allowed to stand, this interpretation would enable Colorado to foist the effects of its opt-out decision on state banks across the country.”
Office of the Comptroller of the Currency
“The FDIC has a vital interest in maintaining a strong and vibrant dual-banking system, which requires a level playing field for state-chartered institutions to compete with
national banks.”
Federal Deposit Insurance Corporation
Background
At issue is a 2023 Colorado law (HB23-1229) opting the state and its state-chartered financial institutions out of the federal Depository Institutions Deregulation and Monetary Control Act (DIDMCA) of 1980. While no one disputes Colorado’s right to opt-out its chartered institutions, Colorado also seeks to enforce its state-level interest rates and fee caps on loans made by out-of-state, state-chartered institutions to Colorado residents. The plaintiffs – NAIB, AFSA and AFC – filed a federal lawsuit challenging Colorado’s expanded interpretation of the opt-out.
The plaintiffs garnered a preliminary injunction against Colorado in 2024 that is still in place today. Colorado appealed and the matter is now before the 10th Circuit Court of Appeals, which granted a motion for a rehearing before the full court (i.e. en banc). Background and a full timeline is available here. The Court will hear oral arguments in the case on August 18.
The plaintiffs are grateful to all the amici for their thoughtful opposition to Colorado’s efforts to defy the careful limits on opt-outs that Congress established in DIDMCA, which were designed to protect the federal interstate banking system.