FDIC Withdraws From Colorado DIDMCA Case
Yesterday the Federal Deposit Insurance Corporation (FDIC) withdrew its amicus brief in support of Colorado’s appeal to the US Tenth Circuit Court of Appeals. The federal district court previously enjoined Colorado’s DIDMCA opt-out law from going into effect.
The three plaintiffs–AFSA, the National Association of Industrial Bankers, and the American Fintech Council–represent national, regional, and state-based responsible, ethical lenders. Some members operate or utilize state-chartered banks as part of their business model.
The Colorado statute purported to curb “predatory” lending by state-chartered federally insured banks chartered in states other than Colorado. DIDMCA is a federal law passed by Congress after the U.S. Supreme Court held that the National Bank Act permits national banks to export rates to all other states, no matter the bank’s “home state.” DIDMCA allows state-chartered federally insured banks to export interest rates to other states, just as national banks do. This parity allowed innovation and new competition for consumer-credit products.
Colorado’s position that it can control the rate other states’ state-chartered banks can charge when a loan is made to a Colorado consumer is inconsistent with DIDMCA.
AFSA believes Colorado’s position undermines the competitive position of state banks chartered outside Colorado, and would not advance the state’s goals. AFSA also published an op-ed on the topic.
In April of 2024, the FDIC submitted an amicus brief in support of the Colorado attorney general in the district court, and showed up in court to argue alongside the state. AFSA was frustrated by the FDIC’s participation in the case at the district court level because their argument about what DIDMCA says represented a complete departure from their perspective first expressed as long 40 years ago. The FDIC filed its brief in the Tenth Circuit in September 2024.
AFSA is heartened by the FDIC’s withdrawal from the case.
February 25th, 2025
