House Financial Services Committee Advances DIDMCA Opt-Out Clarification Bill

On September 16, 2026, the House Financial Services Committee (Committee) approved H.R. 7866, the American Lending Fairness Act of 2026, legislation introduced by Rep. Warren Davidson (R-Ohio) and Rep. Andy Barr (R-KY) that would address the effect of state opt-outs under Section 525 of the Depository Institutions Deregulation and Monetary Control Act of 1980 (DIDMCA) on interest-rate exportation by state-chartered banks and credit unions located outside an opt-out state and making loans to a resident of the opt-out state. There is a companion bill with the same short title and text introduced by Senator Bernie Moreno (R-Ohio) in the Senate which has not yet been acted upon.

The Committee considered H.R. 7866 during its September 16 markup and approved it, as amended, by a vote of 31-18. All Republicans voted for the bill, along with Democrats Joyce Beatty (D-Ohio), Bill Foster (D-Ill.), and Brad Sherman (D-Calif.). The Committee’s official materials identify an amendment in the nature of a substitute offered by Rep. Davidson. The amended bill made technical, non-substantive changes to the bill before it was voted upon.

The bill would repeal DIDMCA Section 525 and amend Section 27 of the Federal Deposit Insurance Act to provide that, if a state adopts a law or certifies that its voters have approved a provision stating that the state does not want Section 27 to apply to loans made by institutions chartered by that state, Section 27(a) would not apply to loans made by those institutions after the opt-out. The bill contains a parallel provision for state-chartered federally insured credit unions.

The legislation is being considered against the backdrop of litigation brought in federal district court by financial-services trade associations challenging Colorado’s and Oregon’s interpretations of the effect of their DIDMCA opt-outs. In Colorado, trade associations representing banks and other financial institutions have challenged the state’s position that its opt-out empowers it to regulate interest rates charged by out-of-state state banks making loans to Colorado residents. The Tenth Circuit en banc court is considering whether to affirm a District Court’s award of a preliminary injunction precluding the state of Colorado from enforcing the Colorado usury law against out-of-state state banks making loans to Colorado residents. Similar litigation has been filed in Oregon concerning that state’s opt-out. Those cases raise questions about the legal effect of state opt-outs and whether they can limit the ability of state-chartered banks and credit unions in other states to export their home-state interest rates to borrowers in the opt-out state. The litigation could affect the legal landscape while Congress considers whether to address the issue legislatively. It should be noted that H.R. 7866’s stated purpose is “To 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.”

The Committee’s action represents an important step for legislation that is intended to restore what its proponents describe as interest-rate exportation parity between state-chartered and national banks. Committee Chairman French Hill said the bill would “preserve charter choice” by allowing state-chartered banks and credit unions to offer loans nationwide under the interest-rate rules of their home states.

What happens next?

H.R. 7866 now moves beyond the Committee. The next major step would be consideration by the full House of Representatives. If the House passes the legislation, it would then have to be considered by the Senate and, if approved there in identical form, presented to the President for signature.

The timing of a House vote has not yet been announced. We will continue to follow the legislation, particularly because its next stages, and the pending litigation in Colorado and Oregon, will help determine whether Congress ultimately acts to clarify the effect of state DIDMCA opt-outs on interstate lending by state-chartered financial institutions.