Sponsors (4)
The bill protects borrowers by enforcing state interest-rate caps nationwide and preventing excessive charges, but it risks reducing credit availability in some states, encouraging migration to less-regulated lending channels, and imposing compliance burdens on national lenders.
Low-income and other consumers: the bill prevents creditors from charging interest or fees above the borrower's state legal APR, lowering potential borrowing costs for high-rate loans.
Borrowers nationwide: the federal rule creates a consistent baseline by requiring creditors to follow each borrower's state rate cap regardless of other state or federal laws, increasing predictability of legal protections.
Homeowners with residential mortgages: the bill leaves existing mortgage rules and pricing unchanged by exempting residential mortgage loans from the cap, preserving current mortgage market structures.
Borrowers in states with low rate caps (and some small-business owners): lenders may stop offering certain consumer credit products in those states, reducing local credit availability and options.
Consumers across states: the law could produce uneven credit availability—residents of some states may lose access to higher-cost products that remain available to others—creating geographic disparities in credit options.
Consumers generally: some lending could shift into exempt categories or alternative nonbank channels that avoid the cap, which may reduce consumer protections and oversight for those loans.
Based on analysis of 2 sections of legislative text.
Makes the borrower's state law the cap on APR for non-mortgage consumer credit, banning any APR (including fees) above that state maximum.
Introduced January 29, 2026 by Sheldon Whitehouse · Last progress January 29, 2026
Bars non-mortgage consumer credit transactions from charging an annual percentage rate (APR) — including fees that count toward APR — that exceed the maximum interest rate allowed by the law of the State where the consumer lives. The rule applies to creditors wherever they operate and supersedes other laws that might otherwise allow higher rates. Residential mortgage transactions are excluded.