Committee Approves Bill to Clarify DIDMCA Opt-Out Rules

September 18, 2026 - 19:26

On September 16, 2026, the House Financial Services Committee approved H.R. 7866, the American Lending Fairness Act of 2026. The legislation aims to clarify how states can opt out of certain federal interest rate provisions under the Depository Institutions Deregulation and Monetary Control Act, commonly known as DIDMCA.

The bill addresses long standing confusion over Section 525 of DIDMCA, which allows individual states to override federal interest rate ceilings for loans made within their borders. Under current law, the process for adopting an opt-out has been unclear, leading to inconsistent interpretations among lenders, regulators, and state officials. The new measure sets a defined procedure for states that wish to exercise this authority, requiring formal notice and a waiting period before any opt-out takes effect.

Supporters argue the bill brings needed predictability to consumer lending markets. They say it will prevent sudden rate changes that can disrupt credit access for borrowers. Opponents contend the legislation could slow state level efforts to protect residents from high cost loans.

The bill now moves to the full House for consideration. If passed, it would take effect one year after enactment.