The Federal Deposit Insurance Corporation (FDIC) has withdrawn its amicus brief supporting Colorado's appeal to the US Tenth Circuit Court of Appeals. This development follows a federal district court decision that prevented Colorado's DIDMCA opt-out law from being implemented.
The case involves three plaintiffs: the American Financial Services Association (AFSA), the National Association of Industrial Bankers, and the American Fintech Council. These organizations represent lenders operating on national, regional, and state levels, with some utilizing state-chartered banks in their business models.
Colorado's statute aimed to address "predatory" lending practices by state-chartered federally insured banks based outside of Colorado. The Depository Institutions Deregulation and Monetary Control Act (DIDMCA) is a federal law that allows state-chartered federally insured banks to export interest rates across states similarly to national banks. This legislation was intended to foster innovation and competition in consumer credit products.
AFSA contends that Colorado's stance on regulating interest rates for loans made to Colorado consumers by out-of-state banks contradicts DIDMCA. According to AFSA, this position could undermine the competitiveness of non-Colorado chartered state banks without advancing the state's objectives. AFSA also expressed its views through an op-ed on the matter.
In April 2024, the FDIC had submitted an amicus brief backing the Colorado attorney general at the district court level and participated in court proceedings alongside the state. AFSA expressed frustration over this involvement, citing it as a departure from FDIC's long-standing interpretation of DIDMCA since 40 years ago. The FDIC later filed its brief with the Tenth Circuit in September 2024.
AFSA has welcomed the FDIC's decision to withdraw from the case.