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On February 12, Senator Bernie Moreno introduced the American Lending Fairness Act of 2026, legislation that would amend the Federal Deposit Insurance Act and the Federal Credit Union Act to clarify the scope of federal interest rate exportation for state-chartered banks and credit unions.
The bill would revise the Federal Deposit Insurance Act and the Federal Credit Union Act to provide that, if a state elects to opt out of federal interest rate preemption, that decision would apply only to loans made by institutions chartered by that state. As drafted, a state could continue to regulate the rates charged by its own state-chartered institutions, but it could not extend those caps to loans made by out-of-state, state-chartered banks or credit unions relying on federal authority.
The legislation also repeals Section 525 of the Depository Institutions Deregulation and Monetary Control Act of 1980 (DIDMCA), and specifies that the new amendments would govern the legal effect of prior state opt-outs adopted under that provision. DIDMCA established the framework permitting state-chartered, federally insured institutions to export interest rates across state lines, subject to a state opt-out mechanism.
Putting It Into Practice: The American Lending Fairness Act of 2026 represents a direct response to ongoing disputes over DIDMCA's opt-out structure (previously discussed here). State-chartered banks, credit unions, and bank-fintech partnership participants engaged in multistate lending should monitor the bill's progress closely and assess how potential statutory changes could affect product design, rate-setting practices, and compliance frameworks.
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