Sponsors
The bill shifts interest-rate authority back toward states—giving state-chartered lenders more autonomy and preserving prior state actions—but at the cost of potentially higher loan rates in opting states, more regulatory complexity for multi-state lenders, and less uniform consumer protection nationwide.
State-chartered banks and credit unions: can choose to apply their state's interest-rate rules to in‑state loans, restoring state regulatory autonomy and preserving the legal effect of prior state laws or voter certifications.
Borrowers in states that opt out: may get increased access to local lending options because in‑state institutions can charge rates set under state law.
State governments and local regulators: avoid retroactive disruption because the bill preserves the legal effect of prior state laws or voter certifications adopted under the repealed federal provision.
Consumers (especially low-income borrowers) in states that opt out: could face higher interest rates on loans if state law permits higher rates.
Lenders that operate across state lines: will confront a patchwork of state opt-outs that increases compliance complexity and costs, which can be passed on to consumers.
Borrowers nationwide (especially those in states with weaker protections): may lose uniform federal interest-rate protections as standards shift to state-by-state outcomes.
Based on analysis of 2 sections of legislative text.
Introduced February 12, 2026 by Bernardo Moreno · Last progress February 12, 2026
Allows each State to opt out of federal rules that let out-of-state banks and credit unions apply their home state interest rates to loans made to in-state borrowers. The bill repeals a prior federal provision and makes clear that loans made or committed to after a State adopts the opt-out follow the State’s law. The change affects insured depository institutions and insured credit unions chartered by a State, and preserves the legal effect of any earlier state laws or voter certifications put in place under the repealed federal provision.