On August 26, a state senator introduced S10688 in the New York Senate, which would exercise New York’s opt-out election under DIDMCA Section 525 with respect to covered consumer credit transactions made in the state. The bill would amend the banking law to provide that the federal interest rate authority extended by DIDMCA Sections 521 through 523 shall not apply to covered consumer credit transactions made in New York. The bill defines a “covered consumer credit transaction” as a consumer credit transaction made in the state for which a covered state-chartered institution or a covered participant asserts federal interest rate authority derived from the DIDMCA — excluding first-lien mortgages and federally chartered institutions — and establishes a broad definition of when a transaction is “made in” New York, including when a consumer is solicited, applies for credit, receives funds, or is collected from in the state. Violations would be enforceable by both the superintendent and the attorney general, with civil penalties of up to $2,500 per violation or $10,000 per knowing or willful violation. The bill would take effect 180 days after becoming law.

The introduction of S10688 comes as the House Financial Services Committee on September 2 held a hearing that, in part, considered H.R. 7866, the “American Lending Fairness Act of 2026,” which would move in the opposite direction. The federal bill would repeal DIDMCA Section 525 and amend Section 27 of the FDI Act and Section 205(g) of the Federal Credit Union Act so that a state could opt out of federal interest-rate preemption only with respect to loans made by institutions chartered by that state, not to loans made by out-of-state chartered institutions. According to the committee memo, H.R. 7866 seeks to “preserve DIDMCA’s intent of parity amongst all lending institutions” by ensuring that state opt-outs from federal interest rate preemption reach only in-state chartered banks and credit unions.