Sponsor
Bernardo Moreno
Senator · R-OH
Senator · R-OH
The bill shifts authority to states to set interest-rate rules for in‑state lending—preserving existing opt-outs and local control—while risking higher costs or weaker protections for some borrowers and greater compliance burdens for multi‑state lenders.
State-chartered banks and credit unions can use their state's allowable interest-rate rules for in-state loans, expanding state control over lending terms.
Borrowers in states that opt to apply state rules will face clearer, locally governed interest-rate standards for covered loans, reducing legal uncertainty for those loans made after enactment.
The bill preserves existing state opt-outs under the prior statute so lenders and borrowers are not subject to retroactive changes, avoiding immediate disruption to existing certifications.
Borrowers in states that opt out of the federal standard could face higher interest rates or weaker consumer protections if state rules permit higher rates.
Removing uniform federal preemption increases compliance complexity and costs for multi-state lenders, which could be passed on to consumers as higher fees or reduced credit availability.
Repealing the prior statutory provision and replacing it with new opt-out rules could prompt transitional legal disputes about which standard applies, creating short-term uncertainty for borrowers and lenders.
Based on analysis of 2 sections of legislative text.
Allows states to opt out of federal interest‑rate preemption for loans made by state‑chartered banks and insured state credit unions, making in‑state loans subject to state law after enactment or voter certification.
Official title: Restore and clarify the intent of the Federal interest rate exportation parity for State-chartered banks by allowing States to opt out of preemption only with respect to loans made by their own chartered institutions, and for other purposes.
Introduced February 12, 2026 by Bernardo Moreno · Last progress February 12, 2026
Allows states to opt out of federal interest-rate preemption for loans made by state‑chartered banks and insured state credit unions. After a state passes a law or certifies a voter‑approved measure declaring that federal preemption should not apply, in‑state loans and commitments made by institutions chartered in that state will be governed by state law rather than the federal preemption rules. The bill also repeals an older statutory provision (12 U.S.C. § 1730g) while preserving the legal effect of any prior state actions taken under that provision, which will now be governed by the new opt‑out rules.