Sponsors
The bill restores state control and gives in-state lenders clearer legal authority over interest-rate rules (including retroactive clarity for past opt-outs), at the cost of potentially higher borrowing costs, regulatory patchwork, and greater confusion for interstate borrowers.
State governments and previously opted-out states: regain clear legal authority to have in-state banks and credit unions apply state interest-rate rules to loans made after an opt-out, and the statute clarifies the legal effect of prior opt-outs.
In-state banks and credit unions: obtain clearer legal authority and reduced litigation risk to set interest rates under state law for loans made after an opt-out, lowering legal uncertainty for lenders.
Consumers and small businesses in states that opt out: may face higher interest rates on loans if state caps are more permissive, increasing borrowing costs.
Interstate borrowers and other consumers: may be confused about which state's interest-rate rules apply when lending terms differ by chartering state, complicating transparency and comparisons.
Consumers nationwide: losing the prior federal uniform floor on rate limits could enable regulatory arbitrage that favors higher-cost lending practices and weakens consistent protections.
Based on analysis of 2 sections of legislative text.
Gives States the choice to opt out of federal interest-rate preemption for loans by in-state-chartered lenders and repeals the prior 1980 provision governing opt-outs.
Introduced February 12, 2026 by Bernardo Moreno · Last progress February 12, 2026
Allows each State to opt out of the federal rule that blocks state interest-rate limits for loans made by lenders chartered in that State. A State may opt out by passing a law or by voter certification, and the federal preemption will no longer apply to loans or commitments made after the opt-out takes effect. Also repeals an older 1980 federal provision and says the new opt-out rules govern any prior state opt-outs adopted under that old law. The change could create different interest-rate rules across States and affect lenders, borrowers, and regulators.