Colorado Judge Rejects Bank Ability to Assign Loans to Fintech

Federal preemptions for banks on state interest rate caps don’t extend to transactions involving fintech lenders and other non-banks, a Colorado judge ruled.

The state court ruling is a potential headache for the fintech industry and is at odds with a new rule from the Office of the Comptroller of the Currency that takes the opposite view.

Extending the National Bank Act’s preemption of state caps “to third parties would be an overly broad application of the NBA,” said Judge Michael Vallejos of the District Court for the City and County of Denver, Colo., in a June 9 ruling.

Non-banks ...