As previously covered by InfoBytes, the U.S. District Court for the District of Colorado preliminarily enjoined enforcement of Colorado’s UCCC against state-chartered banks not located in Colorado providing loans to Colorado residents. The district court concluded that a loan is “made” where the bank is located and performs its loan-making functions, aligning with the plaintiffs’ interpretation of DIDMCA. The court also found that the balance of equities favored the plaintiffs, as Colorado’s law would disadvantage state-chartered banks compared to national banks, reducing options for Colorado consumers. The Colorado Attorney General appealed that decision to the Tenth Circuit.

On November 15, the plaintiffs-appellees, a group of financial services associations, filed their response to the Attorney General. The plaintiffs argued that under the DIDMCA, a loan is “made” where the bank performs its loan-making functions, not where the borrower resides. They contended that Colorado’s interpretation overreached by passing legislation to impose interest-rate caps on loans made by banks operating outside Colorado to persons in Colorado. The plaintiffs emphasized that the National Bank Act preempted state law, allowing national banks to charge interest rates based on the laws of the state where they are located, not where the borrower lives. They argued that DIDMCA Section 521 extends this preemption to state-chartered banks. The plaintiffs requested that the 10th Circuit affirm the district court’s preliminary injunction and also support oral arguments.