On November 9, Oregon Attorney General Dan Rayfield and the attorneys general of 16 other states and the District of Columbia sent a letter to House Speaker Mike Johnson (R-LA) and Minority Leader Hakeem Jeffries (D-NY) opposing H.R. 7866. The bill, the American Lending Fairness Act of 2026, would repeal Section 525 of the DIDMCA, which allows a state to opt out, for loans made in the state, of Section 521’s authorization for state-chartered banks to charge the interest rate permitted in their home state, and would amend the FDI Act and the Federal Credit Union Act to limit any opt-out to loans made by institutions that the state charters. The House Financial Services Committee voted 31-18 in September to advance the bill to the full House (previously covered by InfoBytes here).

The attorneys general contended that, by removing states’ ability to opt out of that preemption, the bill would jeopardize their authority to impose usury caps and enforce them against out-of-state online lenders. They also argued it would unwind what they called a “nearly fifty-year-old compromise” between states’ consumer protection interests and state banks’ ability to export their home-state rates. The letter described banking and consumer protection as core state police powers and noted that 45 states and the District of Columbia set interest-rate ceilings for small to mid-size consumer installment loans.

The coalition asserted that the opt-out has become more important as nonbanks increasingly partner with state-chartered banks to market high-interest loans online, a practice it characterized as evading state usury limits. As an example, the letter cited a 2023 Colorado attorney general matter involving what it called a “rent-a-bank” operator that purportedly made thousands of loans in the state at annual rates above 100 percent. It also pointed to the OCC’s earlier efforts to curb similar arrangements involving national banks, which the agency called an “abuse of the national bank charter.” The attorneys general noted that Iowa and Puerto Rico have long maintained opt-outs, with Iowa enforcing its laws in recent years against what the letter called “predatory fintech lending”; that Colorado and Oregon recently enacted opt-out legislation (covered here and here); and that other states and the District of Columbia have considered doing so. The coalition urged the House to reject what it characterized as a “federal takeover of the dual banking system” and to vote against the bill.