Summary
A Federal Appeals court has permitted Colorado to enforce its interest rate cap (usually 21%) against state-chartered banks lending to Colorado borrowers. Other states are likely to follow.
Fintechs working with state banks to operate national lending programs should expect to navigate a maze of rate caps limiting the scope and interest rates of their programs across opt-out states.
National banks are not affected by this ruling. Column retains the ability to export California’s interest rate laws (which have no cap) nationwide. While state banks face uncertainty, Column offers partners a stable, uniform, and legally resilient foundation for lending across the country.
Background: Interest rate maximums
National banks can charge the interest rate of their home state or the discount-plus-one rate, in any jurisdiction nationwide, with no exceptions.
State-chartered banks can charge the home state or the discount-plus-one rate — except in states that opt out of rate exportation.
Generally, the maximum interest rate a bank can charge is set by the jurisdiction where the bank is chartered.
National banks (like Column): Under the National Bank Act (NBA), national banks operate under a unified standard. They can charge the rate allowed by their home state or the "discount-plus-one" rate (1% over the 90-day commercial paper rate in the bank’s Federal Reserve district) in any jurisdiction nationwide. Because Column is a national bank located in California — which has no interest rate cap — Column can export that lack of a cap to borrowers in all 50 states.
State-chartered banks: State banks face a much more complex web of rules. While the Depository Institutions Deregulation and Monetary Control Act (DIDMCA) attempted to give state banks rate-exportation parity with national banks, it contains an "opt-out" provision. States can pass laws rejecting rate exportation for loans made in that state.
National banks enjoy preemption from these opt-outs. But until now, it wasn’t clear that opt-outs were enforceable against out-of-state, state-chartered banks lending to borrowers in opt-out states.
What happened in the 10th Circuit?
State-chartered banks and their fintech partners can no longer export rates above Colorado’s cap to Colorado borrowers. This ruling does not impact national bank lenders, which can still export their home state rates without interference.
Colorado passed a new law opting out of DIDMCA, and was preparing to enforce state interest rate caps — generally 21% — on loans to Colorado residents.
State-chartered banks and fintechs sued to stop enforcement, arguing that the opt-out only applied to loans originated by Colorado-based lenders. However, the 10th Circuit Court of Appeals sided with the state. The court concluded that Colorado’s opt-out allows the state to enforce its interest rate caps on any state-chartered bank lending to a Colorado borrower, regardless of where the bank is located.
This means that if a state-chartered bank or their fintech partner were to lend to a Colorado borrower at an interest rate above Colorado’s cap, that loan would be considered illegal. The state-chartered bank and its partner could be subject to enforcement activity, including investigations, cease-and-desist orders, fines, and more.
What does this decision mean for fintechs?
Business as usual for fintechs working through national banks. Fintechs working through state lenders should expect huge changes in how they operate national lending programs.
For fintechs relying on state-chartered lenders, this decision forces big operational changes:
Colorado borrowers must now be "carved out" of any consumer lending program with rates above Colorado’s cap.
This decision provides a legal contagion risk and blueprint for other states to enforce their own caps against out-of-state state banks.
The decision is binding in the 10th Circuit (Oklahoma, Kansas, New Mexico, Colorado, Wyoming, and Utah). If any of these states pass similar opt-out laws, state banks will immediately lose the ability to export rates there.
Currently, only Colorado, Iowa, and Puerto Rico have opted out of DIDMCA, but more may be coming. Several states — Arizona, California, Connecticut, Hawaii, Maine, Massachusetts, Michigan, Minnesota, New York, Pennsylvania, Oregon, Vermont, Washington, and D.C. — filed amicus briefs in support of Colorado. This signals broader political appetite to impose similar caps on state bank lending programs.
(Note: California imposes interest rate caps and other lending restrictions on non-bank lenders that do not apply to California banks.)
Conclusion
The 10th Circuit’s decision creates incredible uncertainty for the state-chartered banking model. Unless the Supreme Court or a special sitting of the full 10th Circuit overturns the decision, this precedent is likely to stand. As more states follow Colorado’s lead, operationalizing a national lending program via state-chartered lenders will become increasingly fractured and difficult.
As a nationally-chartered bank, Column’s authority to export home-state rates remains absolute and unaffected by state-level opt-outs. We continue to offer consistent, reliable lending products for any APR range to borrowers anywhere in the country.
Our legal team is available to discuss any questions you may have about the ruling or plans for your program.
References
Federal Appeals Court decision: Nat. Ass’n. of Indus. Bankers v. Weiser, Docket No. 24-1293 (10th Cir. 2025).
NBA-permitted interest rates: 12 U.S.C. § 85.
DIDMCA-permitted interest rates: 12 U.S.C. § 1831d.
Colorado interest rate caps: Colo. Rev. Stat. § 5-13-106.
