Comptroller of the Currency Jonathan V. Gould has issued a statement following the decision by the U.S. Court of Appeals for the Tenth Circuit in National Association of Industrial Bankers v. Weiser.

For context, the State of Colorado in 2023 exercised its right under Section 525 of the Depository Institutions Deregulation and Monetary Control Act of 1980 (DIDMCA) to opt-out of Section 27 of the Federal Deposit Insurance Act with respect to “loans made in such State.”

Section 27 confers on a state bank the same usury/interest rate authority national banks possess under Section 85 of the National Bank Act to export the interest rate allowed by the bank’s home state. A district court initially ruled that Colorado interest rate limits were nonetheless preempted for loans made by state banks located outside Colorado. It enjoined the statute’s enforcement. However, the Tenth Circuit Court of Appeals reversed.

Comptroller Gould noted, “[T]he 10th Circuit has allowed Colorado to dictate the interest rate that a state bank located outside of Colorado may charge on certain loans. This decision risks undermining state banks’ ability to effectively administer multi-state lending programs and, perhaps more importantly, disadvantages state banks that wish to lend in Colorado compared to national banks and Federal savings associations. Such an outcome is fundamentally inconsistent with Congress’s efforts to create competitive equality between state and federally chartered banks. Courts or, if necessary, Congress should remedy this outcome.”

Author: sdbrownlow

Student of Design