New Year, Same Concerns - DIDMCA Opt-Out and True Lender Legislative Proposals to Watch

The FinTech industry continues to face increased scrutiny through proposed state legislation and ongoing litigation regarding the impact of Colorado’s opt-out from the Depository Institutions Deregulation and Monetary Control Act (DIDMCA). 

Since December 2025, four states have introduced legislation seeking to impose true lender laws or opt-out from DIDMCA. The U.S. Court of Appeals for the Tenth Circuit also issued a 2-1 decision in NAIC v. Weiser on November 10, 2025 upholding Colorado’s DIDMCA opt-out, concluding that Colorado can enforce its interest-rate caps on loans made by out-of-state state-chartered banks to borrowers residing in Colorado. This decision reverses an earlier preliminary injunction by the District Court that prevented Colorado from imposing its usury restrictions against the plaintiff trade associations and their members. Currently, a petition for a rehearing en banc is pending.

Sections 521-523 of DIDMCA empower states by authorizing federally insured, state-chartered banks and credit unions to contract for the interest rate permitted by the state where the bank is located, and export that interest rate into other states. In June 2023, Colorado signed into law legislation exercising its right under Section 525 to opt out of DIDMCA, which it believes will require state-chartered banks and credit unions to adhere to Colorado laws regarding interest rate and fee limitations.

Wisconsin:

In December 2025, a true lender bill was introduced in Wisconsin, AB 763/SB 759. The bill specifies that a person also makes a consumer loan, regardless of whether the person purports to act as an agent, service provider, or in another capacity, if (1) the person holds, acquires, or maintains the predominant economic interest in the consumer loan; (2) the person markets, brokers, arranges, or facilitates the consumer loan and holds the right or first right of refusal to purchase the consumer loan or any interest in or receivable from the consumer loan; or (3) the totality of the circumstances indicate that the person is the lender with respect to the consumer loan and the transaction is structured to circumvent or evade the requirements applicable to licensed lenders. 

The bill also specifies circumstances weighing in favor of a person being considered the lender on a consumer loan, including whether the person indemnifies, insures, or protects an exempt entity from costs or risks related to a consumer loan, and whether the person predominantly designs, controls, or operates the lending program under which the consumer loan is made. The bill also contains anti-evasion provisions.

Rhode Island:

On January 23, 2026, the former 2025 true lender and DIDMCA opt-out bill (HB 6055/SB 386) was reintroduced in Rhode Island as SB 2206. The companion bill, HB 7850, was introduced on February 27, 2026.

The bill proposes amendments to Rhode Island’s laws regarding interest and usury by adding a new section that allows the state to opt out of certain provisions of the DIDMCA. Specifically, it expressly rejects the application of the amendments made by sections 521 through 523 of DIDMCA with respect to loans “made” within the state as a means to ensure that out-of-state, state-chartered financial institutions do not benefit from rate exportation. 

The bill further includes “true lender” tests and clarifies that a person will be deemed a lender, regardless of their claimed status as agents or service providers or in another capacity for another exempt entity, including the predominant economic interest standard, the prohibition applicable to bank agents and servicers, and a totality of the circumstances test. The bill also includes anti-evasion provisions. 

New York:

On February 3, 2026, New York proposed true lender bills, AB 10133 and AB 10133A, that requires a “lender” who makes a “personal loan” to comply with rate limitations imposed by New York law, effectively prohibiting non-banks if deemed the true lender from making loans when using exempt third parties for the purpose of evading predatory loan protections. 

The bill broadly applies to "personal loans," which is broadly defined to include any extension of money or credit to a natural person for consumer purposes, and includes both open-end and closed-end loans. "Personal loan" excludes (1) open-end credit plans defined by the federal Truth in Lending Act and its implementing Regulation Z that is accessed by a credit card or device that contemplates similar repeated transactions; (2) loans secured by a mortgage, deed of trust, or similar security instrument on real property, and includes a home equity line of credit; and (3) any other extension of credit that is subject to a licensing or regulatory regime that is subject to ongoing supervisions, enforcement, and examination by the New York Department of Financial Services. 

A "lender" includes any person, including an affiliate or subsidiary of such person that (1) offers or makes a personal loan; (2) purchases or acquires a whole or partial interest in a personal loan or receivable arising from a personal loan; (3) arranges, brokers, or facilitates a personal loan for a third party; or (4) acts as an agent for a third party in making a personal loan, regardless of approval, acceptance, or ratification by the third party necessary to create a legal obligation for the third party. The definition also includes that a person is the "lender" if they purport to act as an agent, service provider, or in another capacity for an exempt entity if  (1) the totality of the circumstances indicate the person is the lender, (2) the person holds the predominant economic interest in the loan, or (3) the person markets, brokers, or arranges the loan and holds the right of first refusal to purchase the personal loan, receivable, or interest.

NAIB v. Weiser:

As previously mentioned, the U.S. Court of Appeals in NAIC v. Weiser upheld Colorado’s DIDMCA opt-out, and reversed the prior preliminary injunction by the District Court that prevented Colorado from imposing its interest rate and fee limitations against the plaintiff trade associations and their members. 

After the 2-1 decision in favor of the DIDMCA opt-out, the plaintiffs-appellees filed a petition for rehearing en banc on December 9, 2025, arguing that the majority (1) created a circuit split with Jessup v. Pulaski Bank, 327 F.3d 682 (8th Cir. 2003), which adopted a contrary interpretation of similar language in a related statute; (2) conflicts with Supreme Court precedent by improperly applying a presumption against preemption and ignoring the express provision in Section 521; and (3) incorrectly decided an issue of significant importance to the consumer lending market in the United States and deprives the state-banks in non-opt-out jurisdictions the interest rate parity with national banks created by Congress in DIDMCA.

In mid-December, a flurry of amicus curae briefs were filed in support of the rehearing by, among others, the Office of the Comptroller of the Currency (“OCC”) and the Federal Deposit Insurance Corporation (“FDIC”), and 20 state attorneys general. The briefs included arguments that the majority interferes with state objectives to preserve equality and competition between state- and nationally-chartered institutions, preserve the dual banking system, and protect the interests of shareholders, depositors, and customers of the financial institutions in these states.  

On January 21, 2026, the Colorado Attorney General’s Office filed a response urging the Tenth Circuit to deny the petition for rehearing en banc, asserting that the Jessup was properly distinguished from the present case, the Supreme Court’s precedent on preemption was properly applied and the opt-out text of Section 525 of DIDMCA was not ambiguous, and subsequently, a rehearing is solely reserved for “extraordinary cases” as opposed to cases of routine statutory interpretation. The Colorado Attorney General asserted that the opt-out does not threaten integrity of the dual banking system, the existing DIDMCA opt-out in Iowa has not caused any significant problems, and that realistically, only the state-chartered banks that partner with high-cost FinTech lenders will be impacted by the Colorado opt-out.

The outcome of whether the Tenth Circuit will grant the rehearing petition is uncertain. In the meantime, we continue to monitor for updates.