A panel of the U.S. Circuit Court of Appeals for the Tenth Circuit today held that Colorado can protect its residents from out-of-state loans from state-chartered banks that carry interest rates above what is permitted under Colorado law. Predatory rent-a-bank lenders charging rates up to 199% APR or higher have taken advantage of federal laws that allow banks to charge any rate permitted in their home state. Reversing the lower court, the appellate court held that states have the right to opt out of that federal law and to require out-of-state, state-chartered banks to comply with the interest rate caps of the consumer’s state.
