Tenth Circuit Expands State Opt-Out Power Under DIDA: “Loans Made In” Includes Either Borrower or Lender Located in the Opt-Out State

Introduction

In National Association of Industrial Bankers v. Weiser, the Tenth Circuit resolved a long-uncertain question at the heart of the Depository Institutions Deregulation and Monetary Control Act of 1980 (DIDA): what does the phrase “loans made in such State” mean in the statute’s state opt-out provision? The majority held that a loan is “made in” an opt-out state if either the lender or the borrower is located there. On that reading, the court concluded that Colorado—having opted out of DIDA § 1831d—may enforce its consumer interest-rate caps against out-of-state, state-chartered banks lending to Colorado residents. The court therefore reversed a district court’s preliminary injunction that had barred the Colorado Attorney General and the Administrator of the Colorado Uniform Consumer Credit Code (UCCC) from enforcing Colorado’s caps against such out-of-state banks.

The case pits three trade associations (National Association of Industrial Bankers, American Financial Services Association, and American Fintech Council) against Colorado’s chief law enforcement officers in their official capacities. It draws extensive amicus participation on both sides, including multiple state attorneys general, financial trade organizations, and the FDIC, reflecting the decision’s national stakes for the dual-banking system, consumer protection, and the future of bank–fintech partnerships often labeled “rent-a-bank” arrangements.

The opinion addresses two principal legal issues. First, whether the plaintiff trade associations have a viable cause of action to challenge state enforcement under federal law; and second, the meaning of “loans made in such State” in DIDA’s Effective Date note (the opt-out clause), which controls the continued preemptive force of § 1831d in a state that opts out. It also reassesses the balance-of-equities and public-interest factors for preliminary injunctive relief.

Summary of the Opinion

Cause of action: The court held that the plaintiffs may proceed under Ex parte Young, which allows private parties to seek prospective equitable relief against state officials for ongoing violations of federal law. Congress did not clearly foreclose equitable relief in DIDA § 1831d, and the FDIA does not provide an exclusive enforcement scheme that displaces Ex parte Young actions.
Statutory interpretation (first impression): Interpreting the phrase “loans made in such State” in § 1831d’s opt-out provision, the court concluded that a loan is “made in” an opt-out state if either the lender or the borrower is located there. The majority derived this conclusion from the statutory text, structure, purpose, and history.
Preemption: Because Colorado validly opted out, § 1831d no longer preempts Colorado’s UCCC interest-rate caps for loans made by out-of-state, state-chartered banks to Colorado borrowers.
Preliminary injunction vacated: The plaintiffs failed to show a likelihood of success on the merits (the most important factor), and the balance of equities/public interest favored Colorado’s enforcement of its valid laws. The court reversed and remanded.
Unresolved issues: The panel expressly did not decide dormant Commerce Clause challenges or conflict-of-laws questions that might arise in particular lending scenarios. Determining where any given loan is “made” remains a fact-specific inquiry.

Analysis

I. Statutory Framework and Context

DIDA § 1831d (Section 521 of DIDA) extended to state-chartered banks the two key interest-rate advantages long available to national banks under the National Bank Act (NBA) § 85:

Access to the “discount-plus-one” federal benchmark (one percentage point above the Federal Reserve’s 90-day commercial paper discount rate); and
Ability to “export” the rate permitted by the state where the bank is located to out-of-state borrowers (even if the borrower’s state imposes lower caps).

DIDA § 1831d contains a unique opt-out provision (codified in the statute’s Effective Date note): a state may reclaim control over interest-rate regulation for “loans made in such State” by passing a law that explicitly opts out of § 1831d. Colorado did so in 2023 (effective July 1, 2024) in response to perceived abuses involving bank–fintech partnerships that exported high rates into Colorado notwithstanding local caps.

II. Precedents Cited and Their Role

National Bank Act lineage and preemption:
- Tiffany v. National Bank of Missouri (1873): Recognized competitive advantages conferred on national banks.
- Marquette Nat’l Bank v. First of Omaha (1978): Held that national banks may export their home-state interest rates to out-of-state borrowers, a cornerstone of modern interstate lending.
- Greenwood Trust Co. v. Massachusetts (1st Cir. 1992): Interpreted DIDA § 1831d as expressly preemptive and extending exportation to state banks; articulated that state banks may charge the highest of three potential rates, including the rate available “in the absence of” § 1831d.
Preemption doctrines:
- Wyeth v. Levine (2009) and Chamber of Commerce v. Whiting (2011): Emphasized that express preemption analysis starts with statutory text, particularly where states exercise traditional police powers (banking and consumer protection).
Equitable cause of action and limits:
- Ex parte Young (1908): Authorizes suits for prospective relief against state officials violating federal law.
- Armstrong v. Exceptional Child Center (2015): Courts look for congressional intent to foreclose equitable relief; an exclusive remedial scheme or a judicially unadministrable standard can bar Ex parte Young actions.
- Friends of the East Hampton Airport v. Town of East Hampton (2d Cir. 2016): Agency enforcement authority alone does not displace equitable suits to block preempted local regulation.
Agency deference:
- Loper Bright Enterprises v. Raimondo (2024): Overruled Chevron deference; courts no longer defer to agencies merely because the statute is ambiguous; deference depends on persuasion and consistency.
- Good Samaritan Hospital v. Shalala (1993) and Christensen v. Harris County (2000): Conflicting or non-formal agency interpretations receive little weight.
Other interpretive authorities:
- Star Athletica v. Varsity Brands (2017), Pereira v. Sessions (2018), Slack Technologies v. Pirani (2023): Textual canons, dictionary usage at time of enactment, and the referential force of “such.”
- Gavey Properties/762 v. First Financial S&L (5th Cir. 1988): In a closely analogous statute, described how, “in the absence of” the federal rate, another state’s law may govern—an anchor point for the majority’s reading that borrower-state law may control in some circumstances.
- Jessup v. Pulaski Bank (8th Cir. 2003): Addressed a different statute (§ 1831u(f) on interstate branching) and deferred under Chevron to an OCC letter. The Tenth Circuit distinguished it as inapposite and analytically outdated post-Loper Bright.

III. The Court’s Legal Reasoning

A. Cause of Action Under Ex parte Young

Applying a three-step framework drawn from Safe Streets Alliance v. Hickenlooper and Armstrong:

Substantive right: Plaintiffs seek to vindicate state banks’ right under § 1831d to charge interest permitted by federal law on loans not “made in” Colorado (i.e., still preempted).
Putative cause of action: A claim in equity to enjoin state officials from enforcing preempted state law. The court found sufficient notice of equitable relief despite the complaint’s initial framing; the amended complaint expressly invoked Ex parte Young.
Viability: Congress did not foreclose equitable relief:
- No sole remedy: § 1831d(b) creates a consumer remedy against banks charging unlawful rates; it is not an exclusive state-facing remedy and does not bar equitable suits to prevent unlawful state enforcement. The FDIC’s general “sue-and-be-sued” authority is not an exclusive enforcement scheme; it primarily waives sovereign immunity.
- Judicially administrable: § 1831d sets objective benchmarks (discount-plus-one; home-state rate), not amorphous standards like those in Armstrong. Courts can administer these rules.

Result: Plaintiffs have a viable Ex parte Young cause of action, but they do not prevail on the merits for preliminary-injunction purposes given the court’s interpretation of “loans made in such State.”

B. Interpreting “Loans Made in Such State” (DIDA § 1831d opt-out)

The central holding is textual. The majority treats the phrase “made in such State” as a participial adjective modifying “loans,” and interprets “loan” and “made” by their ordinary meaning at the time of enactment (1979–1980). A “loan” is a lending transaction involving delivery by one party and receipt by another under an obligation to repay; “made” in this context means “executed.” Thus, an executed loan necessarily implicates both borrower and lender. The phrase “loans made in such State,” the court concluded, encompasses loans in which either the lender or the borrower is located in the opt-out state.

The court’s textual analysis is reinforced by:

Meaningful variation in § 1831d: Subsection (a) expressly ties exportation to “the State … where the bank is located,” whereas the opt-out note uses the broader phrase “loans made in such State” without referencing the lender’s location. By using different words, Congress conveyed different ideas; the opt-out phrase is not confined to the lender’s location.
“In the absence of this subsection” clause: § 1831d(a) applies only if its federal rate exceeds what the state bank could charge without § 1831d. That clause contemplates that, in some scenarios, another state’s law (often the borrower’s) could govern. It would be illogical if an opt-out state could not escape federal exportation while a non-opt-out borrower-state could still supply the governing rate when § 1831d is inapplicable.
Presumption against preemption in fields of traditional state power: Banking and consumer protection are classic areas of state police power. Where text is susceptible of multiple readings, the court favored the reading that narrows federal preemption in opt-out states.
Purpose and legislative history: The opt-out provision drew from the Brock Bill (1974) and the Borrowers Relief Act (1979), both of which included an opt-out “override” to quell concerns about federal intrusion into state usury policy. Section 525 was designed to let states “reverse” the federal overlay. Reading opt-out to allow only a partial override (i.e., to bar discount-plus-one but not exportation) would frustrate that design.

The court also rejected reliance on Title 12 provisions where “made” appears with explicit references to the bank as actor (e.g., “loan made by”), noting that § 1831d’s opt-out phrase lacks such references and operates differently. It further declined to give weight to inconsistent agency letters (FDIC and OTS) spanning decades, particularly in light of Loper Bright.

C. Preliminary-Injunction Factors

Likelihood of success: Because “loans made in such State” includes loans to Colorado borrowers by out-of-state state banks, Colorado’s opt-out removes § 1831d’s preemptive force for those loans. Plaintiffs were unlikely to succeed on the merits.
Irreparable harm: The district court’s finding (administrative burdens, lost revenue/customers/goodwill) went unchallenged and was left undisturbed.
Balance of equities and public interest: The equities/public interest favored Colorado. A state validly exercising its opt-out authority should not be enjoined merely because its policy differs from federal parity goals; national banks remain unaffected under NBA § 85, but that disparity is a permissible consequence of Congress’s inclusion of a state opt-out for state banks in DIDA.

IV. The Concurrence/Dissent (Judge Rossman)

Judge Rossman concurred that Ex parte Young supplies a viable cause of action but dissented from the merits. She would have affirmed the preliminary injunction, adopting a lender-focused reading of “loans made in such State.” Her principal points:

In pari materia: Sections 521 and 525 should be read together to preserve the statute’s purpose—parity between state and national banks. Section 521’s rate rules hinge on the bank’s location; the opt-out should too.
Text and usage across Title 12: “Make/made” typically denotes the bank’s act of making a loan; importing the borrower’s location invents an alien anchor.
Legislative pedigree: The opt-out’s antecedents (Brock Bill and Borrowers Relief Act) addressed intrastate lending (discount-plus), not interstate exportation. Congress did not signal an intent to let opt-out states regulate out-of-state banks’ loans to in-state borrowers.
Uniformity and administrability: Allowing each opt-out state to define where a loan is “made” risks multi-state overlap and patchwork rules that undermine banking uniformity.

The dissent thus viewed both text and policy as pointing to a lender-only definition of where a loan is “made.”

V. Impact and Forward-Looking Considerations

A. For States

This is the first federal appellate decision squarely holding that DIDA’s opt-out allows states to regulate interest on loans to their residents by out-of-state, state-chartered banks. It may embolden additional states to enact opt-outs to curb perceived rent-a-bank models.
Enforcement remains bounded by constitutional limits (e.g., the dormant Commerce Clause) and conflict-of-laws doctrines in particular cases—issues the Tenth Circuit left open.
National banks remain governed by NBA § 85, which has no state opt-out. Opt-out states can regulate state-chartered (not national) lenders; consumers in opt-out states may still receive higher-rate offers from national banks.

B. For Banks and Bank–Fintech Partnerships

State-chartered banks lending to residents of Colorado (and other opt-out jurisdictions, currently Iowa and Puerto Rico) must re-price, re-structure, or cease offerings that exceed local caps, even if the bank’s home-state law permits higher rates.
Bank–fintech “rent-a-bank” arrangements face increased exposure when targeting residents of opt-out states. Whether a loan is “made” in the borrower’s state will be a fact-specific inquiry; marketing, solicitation, approval, disbursal, and nexus facts will matter.
Product adjustments may include using national bank partners, moving key loan-making functions, or segregating opt-out-state portfolios to comply.
Expect increased attention to where a lender is “located” and where “non-ministerial” loan functions occur for other § 1831d issues (e.g., exportation out of non-opt-out states) and to conflict-of-laws analysis where multiple states have material contacts.

C. For Consumers

Opt-out states can now meaningfully enforce local rate caps against out-of-state state-chartered lenders, potentially reducing exposure to very high APR products while possibly constricting credit availability and shifting borrowers toward national banks or nonbank lenders subject to other state rules.

D. Litigation and Policy Trajectory

Expect further appellate activity and potential circuit splits as other courts confront the meaning of “loans made in such State.”
Dormant Commerce Clause challenges and conflict-of-laws questions will likely surface in case-specific contexts, especially for nationwide digital lending programs.
Agencies may revisit guidance, but inconsistent past positions (FDIC/OTS) and Loper Bright’s curtailment of Chevron deference mean courts will lead with textual analysis.
Congress could amend § 1831d or the opt-out note to clarify “loans made in,” particularly in an era of interstate, online lending.

Complex Concepts Simplified

DIDA § 1831d: A federal law letting state-chartered banks charge either the federal benchmark rate (discount-plus-one) or their home-state rate—preempting conflicting state caps.
Opt-Out (Effective Date note): A state can “override” § 1831d by law so that loans “made in” that state are again governed by its own caps.
Rate exportation: Charging borrowers in other states the rate allowed by the bank’s home-state law.
Discount-plus-one: One percent above the Federal Reserve’s 90-day commercial paper discount rate in the bank’s district.
Ex parte Young: A doctrine allowing suits against state officials for prospective relief to stop ongoing violations of federal law.
Sole remedy: If Congress creates a single, exclusive way to enforce a statute, courts usually cannot allow other enforcement methods (not present here for state violations of § 1831d).
Judicially unadministrable: A standard so vague or policy-laden that courts should not enforce it (not the case for § 1831d).
Meaningful-variation canon: Different words used in different parts of a statute are presumed to mean different things.
In pari materia: Related provisions should be read together to form a coherent whole; the dissent relied on this to tie § 525 to § 521’s bank-location focus.

Conclusion

The Tenth Circuit’s decision in NAIB v. Weiser establishes a consequential, first-of-its-kind appellate rule: under DIDA’s opt-out, a loan is “made in” an opt-out state if either the borrower or the lender is located there. That reading significantly broadens state power to reclaim interest-rate regulation over state-chartered banks lending to their residents, even when the bank is chartered elsewhere. It also underscores that Ex parte Young remains available to test state enforcement against federal preemption—but only where the federal statute truly preempts.

The ruling will reverberate in the bank–fintech ecosystem, particularly where programs depend on rate exportation into opt-out jurisdictions. It may spur other states to opt out and will likely generate litigation at the intersection of preemption, the dormant Commerce Clause, and conflict-of-laws. While the dissent warns of disuniformity and diminished parity for state-chartered banks relative to their national counterparts, the majority roots its approach in statutory text, federalism-sensitive preemption principles, and the opt-out’s history as a state “override” of federal rate preemption.

For now, lenders should assume that, at least within the Tenth Circuit, opting-out states can enforce their caps against out-of-state, state-chartered banks lending to in-state consumers. The national picture may evolve as other circuits address this question—and as Congress or regulators consider whether to clarify the statute’s reach in a digital, interstate lending market.