FDIC Says Fintechs Misread Guidance in Suing Over Colorado Law

Financial technology companies and other lenders suing to overturn a Colorado law meant to curb high-interest loans are misinterpreting FDIC guidance, the financial watchdog said.

The Federal Deposit Insurance Corp. asked a federal court for permission to file a friend-of-the-court brief supporting Colorado’s attorney general in defending the law, which effectively blocks the ability of banks chartered outside the state from issuing loans charging above 36% interest.

The case is being closely watched. Other states are weighing opt-out legislation similar to Colorado’s law, and could face some of the same legal questions.

“The FDIC has a substantial interest in refining ...