The full Tenth Circuit has granted en banc rehearing in the Colorado rate-cap case, wiping out a November 2025 panel decision that had put the 36% cap back on out-of-state loans to Colorado borrowers. If you run a bank-partner model, the compliance clock just reset. This is the only regulatory story this week that affects your book in every state you do business in.

What happened: On April 2, 2026, the U.S. Court of Appeals for the Tenth Circuit granted en banc rehearing in National Ass'n of Industrial Bankers v. Weiser, vacating the November 10, 2025 panel decision that had reversed a district court preliminary injunction against Colorado's 2023 DIDMCA opt-out, per Consumer Finance Monitor and Husch Blackwell.¹² The court also ordered supplemental briefing on six threshold questions, including what "loans made in such State" means for DIDMCA Section 525 rate exportation, and stayed the mandate. The district court injunction blocking Colorado's opt-out enforcement remains in effect while the case is reheard.³

Why this is a big deal: Colorado's 2023 opt-out used DIDMCA Section 525 to end federal rate exportation for state-chartered banks making "loans made in" Colorado, imposing the state's 36% usury cap. The district court in June 2024 sided with plaintiffs (the National Association of Industrial Bankers, American Financial Services Association, and American Fintech Council) and read the opt-out as applying only when the lender is located in Colorado. A 2-1 Tenth Circuit panel reversed in November 2025, reading "loans made in such State" as turning on borrower location. That panel reading threatened to force out-of-state banks and their fintech/alt-lending partners to comply with Colorado's 36% cap on every Colorado borrower loan. That reading is now vacated.³

Colorado is the legal vehicle. Oregon is the immediate operational exposure. Oregon House Bill 4116 mirrors the Colorado opt-out almost word-for-word and was awaiting the governor's signature as of early April 2026.¹ If signed, any alt-lender funding Oregon borrowers through a state-chartered bank partner enters the same statutory construction question the Tenth Circuit just took up, with no district court injunction in place to buy the time the Colorado injunction currently buys for Colorado volume. Rhode Island has introduced similar legislation. A federal response (the American Lending Fairness Act of 2026) has also been introduced. For operators with multi-state volume, the live exposure is not Colorado. It is the next signature.

How rare this is: Per the Tenth Circuit's own rules, en banc rehearing is an "extraordinary procedure." This is only the second time in six years the Tenth Circuit has granted it. A majority of the 11 non-recused active judges approved the rehearing. The amicus support was lopsided and notable: the FDIC, OCC, American Bankers Association, Bank Policy Institute, 52 state bankers associations, and 20 state attorneys general filed briefs supporting the rehearing petition, per Consumer Finance Monitor.¹ When federal bank regulators, the industry's biggest trade group, and 20 state AGs line up on the same side of a preemption question, the court usually listens.

To understand why the en banc grant matters, it helps to understand what the vacated panel decision would have meant if it had stood. DIDMCA Section 525, enacted in 1980, lets states "opt out" of the federal rate exportation regime that otherwise allows state-chartered banks to charge their home state's rates on loans to out-of-state borrowers. Colorado invoked Section 525 in 2023 to cap loans to Colorado borrowers at the state's 36% usury ceiling.⁴

The legal fight turned on four words in Section 525: "loans made in such State." The plaintiffs (NAIB, AFSA, AFC) argued that phrase means the lender location controls, so only loans made by lenders physically located in Colorado are subject to the cap. The November 2025 panel ruled the opposite: that borrower location controls, so any loan to a Colorado borrower is subject to the cap regardless of where the lender sits. Read that second interpretation against a fintech-bank partnership model and the practical effect is the same as if every state had adopted its own usury cap with no federal preemption escape valve.³

For alt-lenders funding through state-chartered bank partners (including many MCA, RBF, and near-prime consumer lenders that rely on an Industrial Loan Company or state commercial bank partner for rate exportation), the panel reading would have meant product APRs above 36% to Colorado borrowers were exposed to a usury challenge. Per Husch Blackwell's analysis of the underlying filings, MCA factor rates of 1.2 to 1.5 imply effective APRs well above 36%, and yields would have compressed 40 to 50% at a hard state cap.² The en banc grant vacates that reading and restores the district court injunction, so today, no Colorado borrower is inside a 36% cap under the case as it currently stands.

The Colorado case is not one state's rate-cap fight. It is the leading procedural ruling on whether a state opt-out under DIDMCA Section 525 turns on borrower location or lender location, and every opt-out statute in the pipeline, including the Oregon bill at the governor's desk, is tracking the outcome.

Had the panel decision stood, the next state to follow Colorado would have had immediate precedent for a borrower-location reading, which means the compliance clock for alt-lenders with bank-partner models was measured in weeks, not years. The en banc vacatur extends that clock but does not reset it. The underlying case is still active. A final en banc decision could reinstate the panel reading, affirm the district court injunction, or carve a narrower middle path.

On the cert timeline. Plaintiffs argued in the rehearing petition that the November panel decision created a circuit split with the Eighth Circuit's narrower reading of similar statutory language in Section 27 of the Federal Deposit Insurance Act, per Husch Blackwell.² A genuine circuit split on a federal preemption question involving the bank regulators' own statutory interpretation is exactly the fact pattern the Supreme Court grants cert on. Realistically, the path looks like this: en banc briefing through summer 2026, oral argument late 2026 or early 2027, an en banc opinion likely in 2027. If the losing side files for cert, the earliest plausible Supreme Court decision is 2028, and a longer path into 2029 is also plausible. For operational planning, that means alt-lenders should model two scenarios: (a) en banc affirms the district court injunction and the question dies there, resolved in 12 to 18 months, or (b) en banc reinstates the panel and the case heads to cert, resolved in 24 to 36 months. Either way, the operating assumption should not be "this is over."

The practical takeaway is that the en banc grant buys time without buying certainty. Alt-lenders with material bank-partner volume into opt-out states should use that time deliberately.

Five specific actions for any alt-lender with bank-partner exposure to opt-out or near-opt-out states:

1. Audit your opt-out state exposure now. Pull a clean count of active loans to borrowers in Colorado, Oregon, Rhode Island, and any other state that has introduced DIDMCA opt-out legislation. For each, calculate effective APR (including fees, ICA payments, factor rates converted to APR) and flag anything above the relevant state usury ceiling. You want this number in a single spreadsheet your CRO can read in 30 seconds.

2. Stress-test yield at a 36% cap. Run a scenario model on your P&L assuming a hard 36% cap imposed on all loans to opt-out state borrowers. Per the Husch Blackwell analysis of MCA factor rates, yield compression could run 40 to 50% on high-APR products.² Know the number before you need it.

3. Audit your bank partner's charter type. The DIDMCA fight concerns state-chartered banks. National banks are not in the same exposure lane because they rely on the National Bank Act, not DIDMCA Section 525. If your partner is a state-chartered commercial bank or an Industrial Loan Company in Utah or Nevada, the Colorado case matters to you directly. If it is a national bank, your exposure runs on a different statutory track. Either way, you should be able to state your partner's charter type from memory.

4. Review choice-of-law and geofencing options. Some alt-lenders have responded to previous rate-cap fights by adding choice-of-law clauses favoring non-opt-out states or by geofencing applications to exclude borrowers in high-risk jurisdictions. Neither is a guaranteed defense, and both have second-order effects on origination volume. But if you have not reviewed these options in the last 18 months, the en banc grant is the trigger to do so now.

5. Track the briefing schedule. The Tenth Circuit has ordered supplemental briefing on six threshold questions. Amicus participation is encouraged. Oral argument dates and the eventual decision will telegraph where this goes. Assign someone on your compliance team to monitor the docket. Trade associations (AFC, AFSA, NAIB) will push alerts, but the docket itself is the authoritative source.

_{Sources
1 Consumer Finance Monitor | Tenth Circuit Grants Rehearing En Banc in Colorado Opt-Out Litigation
2 Husch Blackwell | Petition for Rehearing Filed in Colorado DIDMCA Opt-Out Case
3 National Law Review | 10th Circuit to Rehear Landmark DIDMCA Rate Exportation Case
4 CFS Review | DIDMCA Opt-Out Update: Tenth Circuit Reverses Colorado Preliminary Injunction
5 American Fintech Council | Statement on Tenth Circuit Decision to Grant En Banc Hearing
6 U.S. Court of Appeals for the Tenth Circuit | En Banc Order (PDF)}

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