Originally published at americanbanker.com on June 10, 2026.
- Key insight: In passing the Depository Institutions Deregulation and Monetary Control Act, Congress intended to create national rules that would guide lending across state borders. States can’t simply opt out of them.
- What’s at stake: The push for state-level opt-outs is a direct assault on the commerce clause of the U.S. Constitution. The founders intended the commerce clause to prevent exactly what we are seeing today: a balkanized “patchwork” where states erect protectionist barriers that impede the flow of national trade.
- Forward look: As the CFPB retreats, Congress and the courts must step in to reaffirm a coherent national framework. We cannot allow the dual-banking system to be shot down by a coordinated barrage of state-level mandates.
As Oregon joins Colorado in invoking an arcane provision to opt out of federal interest rate limits, the industry is still left communicating with carrier-pigeon efficiency in a fiber-optic world. Yup. The American dual-banking system is currently operating like Cher Ami, the legendary World War I carrier pigeon — blinded by jurisdictional crossfire and desperately trying to deliver a 20th-century message to a 2026 digital economy. With the 10th Circuit’s recent decision to grant an en banc rehearing in National Association of Industrial Bankers v. Weiser, the fate of federal interest rate preemption is up in the air. By vacating a panel decision that threatened to dismantle “most favored lender” status, the court has stayed the execution of national banking parity.
The original message Cher Ami delivered through a storm of friendly fire read: “Our own artillery is dropping a barrage directly on us. For heaven’s sake, stop it.” Today, the financial services industry finds itself in a similar state of friendly fire. As the Trump administration continues to downgrade the Consumer Financial Protection Bureau, or CFPB, reducing it from a centralized regulator to a leaner, less interventionist agency, a vacuum has emerged. Nature abhors a vacuum, and so do ambitious state attorneys general. In the wake of federal retreat, states are launching their own regulatory barrages to include opting out of the Depository Institutions Deregulation and Monetary Control Act, or DIDMCA, Section 521 and effectively shelling the interstate banking channels that provide liquidity to their own citizens.
