Sponsors (2)
The bill returns authority over interest-rate preemption to states—potentially enabling stronger local consumer protections in some places—but increases state-by-state variability, legal uncertainty, and compliance costs that could raise borrowing costs or weaken protections in other states.
Borrowers in states that opt out and those state governments: state-chartered banks and credit unions can have federal rate preemption lifted for in‑state loans when their state explicitly opts out, allowing state law to determine applicable interest-rate rules and consumer protections instead of federal preemption.
Borrowers in states that choose to relax rules: opt-outs could lead to higher interest rates or reduced uniform consumer protections if some states permit higher rates or weaker rules, increasing costs for consumers.
Banks and credit unions operating across state lines: the change creates regulatory fragmentation as each state can set its own rules, increasing compliance, operational complexity, and cost for multi-state lenders.
State governments and financial institutions (and potentially borrowers): repealing the prior 1980 provision and shifting to an opt-out/certification regime may produce legal uncertainty for loans made under previous state certifications until courts interpret the changes.
Based on analysis of 2 sections of legislative text.
Allows States to opt out of specified federal interest-rate provisions for loans by in‑State chartered lenders and repeals a related 1980 statutory provision.
Allows each State to block certain federal interest-rate rules from applying to loans made by institutions chartered in that State if the State enacts a law or certifies voter approval explicitly opting out. It also repeals a 1980 statutory provision related to state certifications and clarifies how past State certifications or laws will be treated under the new rules. The legislation does not change funding or authorize new spending.
Introduced March 9, 2026 by Warren Davidson · Last progress March 9, 2026