In a rare move signaling the significance of the dispute, the U.S. Court of Appeals for the 10th circuit granted en banc rehearing in a court challenge to Colorado’s opt-out from the federal rate-exportation framework for state-chartered banks, vacating the November 2025 panel decision (previously discussed here). This is only the second time in six years that the 10th Circuit has agreed to rehear a case en banc.
Background
In 2023, Colorado enacted legislation opting out of Section 521 of the Depository Institutions Deregulation and Monetary Control Act of 1980 (DIDMCA), which provides state-chartered, FDIC-insured banks the same authority as national banks to export their home-state interest rates to borrowers in other states (previously discussed here). Section 525 of DIDMCA allows states to opt out of this framework for “loans made in such state.” The central question is what that phrase means: does a loan get “made in” the state where the bank is located, where the borrower resides, or both?
A divided panel ruled 2-1 in November 2025 that a loan is “made in” a state if either the lender or the borrower is located there, allowing Colorado to impose its rate caps on out-of-state state-chartered banks lending to Colorado residents. The dissent warned this interpretation would create a patchwork of conflicting state laws and undermine the interest-rate parity between state and national banks that Congress intended.
The En Banc Order
Today’s order vacates the panel decision and directs supplemental briefing on six specific questions, including how DIDMCA’s text, structure, enactment history, and regulatory guidance inform the meaning of “loans made in such State,” whether the phrase is ambiguous, and whether a presumption against preemption applies. All eleven non-recused active judges will rehear the case. The petition for rehearing was supported by the FDIC, OCC, the American Bankers Association, 52 state bankers associations, and 20 state attorneys general.
Why This Matters
The panel decision had prompted a wave of copycat legislation, with Oregon passing its own opt-out bill in March 2026 (previously discussed here) and Rhode Island introducing similar legislation. A congressional response, the “American Lending Fairness Act of 2026” has also been introduced (previously discussed here). Today’s order hits pause on the panel precedent and reopens the foundational question for the full court.
Putting It Into Practice: State-chartered banks and their fintech partners that paused or restructured Colorado lending programs following the panel decision should monitor this case closely. The vacatur means the panel opinion no longer carries precedential weight, though the underlying legal uncertainty persists. Companies should evaluate whether the en banc proceedings, combined with pending federal legislation, affect their near-term product and market strategies for Colorado and states considering similar opt-outs.
