Celia Winslow, President and CEO of the American Financial Services Association (AFSA), said in a press release that the Tenth Circuit’s ruling in Colorado’s Depository Institutions Deregulation and Monetary Control Act (DIDMCA) case could limit consumers’ credit options and undermine the dual banking system by devaluing state bank charters.
“disappointed by yesterday’s 10th Circuit ruling in the state of Colorado’s appeal of a case involving the federal DIDMCA law,” said Financial Services Association. “the panel majority would effectively strip credit options from consumers who can least afford it. at the same time shredding the longstanding and well-functioning interstate dual banking system. We believe the 10th Circuit majority got this one wrong.”
According to Winslow, Congress enacted DIDMCA in 1980 to modernize banking and create parity by allowing Federal Deposit Insurance Corporation (FDIC)-insured, state-chartered banks to “export” their home-state interest rates nationwide under 12 U.S.C. §1831d. Colorado later exercised a DIDMCA opt-out, which led to litigation over whether that opt-out applies to loans made to Colorado borrowers by out-of-state banks. A recent Tenth Circuit ruling in this case intensified the dispute over how “loans made in” a state should be interpreted.
12 U.S.C. §1831d (DIDMCA §521) permits FDIC-insured, state-chartered banks to charge “interest at the rate allowed by the laws of the State… where the bank is located,” and explicitly preempts conflicting host-state usury limits (“notwithstanding any State constitution or statute”). Congress designed this parity to “prevent discrimination against State-chartered insured depository institutions,” enabling interstate rate exportation on equal terms with national banks.
Opt-outs have been rare: soon after DIDMCA’s enactment, seven states (and Puerto Rico) adopted opt-out laws, but over time all but Iowa (and Puerto Rico) repealed or allowed them to expire. Contemporary reviews emphasize that parity has governed interstate lending for decades, with only isolated exceptions—Colorado’s 2023 opt-out being a recent anomaly that reignited the debate.
Founded in 1916, AFSA is the national trade association representing the U.S. consumer credit industry, including vehicle finance companies, mortgage and personal lenders, and credit card issuers. AFSA advocates for fair, competitive credit markets, consumer choice, and responsible lending practices through federal and state policy engagement, education, and industry standards development.
