The House Financial Services Committee today voted 31-18 to advance legislation to prevent states from imposing interest rate caps on loans from out-of-state state-chartered banks and credit unions. Ahead of the vote, the American Bankers Association joined nearly a dozen financial sector associations in voicing support for the bill.
The committee also voted 28-21 to advance legislation to change how the Consumer Financial Protection Bureau is funded and redefine its ability to regulate unfair, deceptive, or abusive acts or practices, or UDAAP.
State lending rate caps
Under current law, states can opt out of the federal Depository Institutions Deregulation and Monetary Control Act, or DIDMCA, allowing them to establish restrictions on loans made by state-chartered banks. The American Lending Fairness Act (H.R. 7866) by Rep. Warren Davidson (R-Ohio) would prevent states from using the opt-out to impose interest rate caps on loans from out-of-state state-chartered financial institutions. A companion bill was introduced in the Senate by Sen. Bernie Moreno (R-Ohio).
In a letter to committee leaders, the associations said the decision by Colorado and Oregon to use the DIDMCA opt-out to impose their jurisdiction on loans to their residents by state institutions chartered in other states “directly contravenes Congress’ original, limited intent” in DIDMCA.
“Passage of federal legislation in the form of the American Lending Fairness Act would not only ensure keeping existing parity between lending institutions on the national and state level and clarity as to the limited scope of DIDMCA’s opt-out provision, it would also provide certainty that the dual banking system is preserved,” the associations said.
CFPB reform
The Consumer Financial Protection Accountability and Reform Act of 2026 (H.R. 10184) would change how the CFPB is funded and operated.
The bureau is unique among federal agencies in that the bureau director requests funding from the Federal Reserve. The bill would instead subject the bureau to congressional appropriations, which Republicans say would make it more accountable to elected officials.
The legislation would also change how the bureau regulates UDAAP. For example, the CFPB would be required to more clearly define the “abusive” standard and no longer be permitted to interpret UDAAP to include discriminatory practices.
ABA supported the legislation along with two other bills advanced by the committee:
- The Civil Investigative Demand Reform Act (H.R. 1653), which would reform the process the CFPB uses to issue civil investigative demands to financial services providers. The vote was 29-20.
- The Taskforce for Recognizing and Averting Payment Scams, or TRAPS, Act (H.R. 4936) would direct the Secretary of the Treasury to establish, within 90 days of enactment, a Task Force for Recognizing and Averting Payment Scams. The vote was unanimous.
