NY Bill Seeks DIDMCA Opt-Out, Impacting Interstate Lenders
A New York bill introduced after the legislative session would opt the state out of DIDMCA interest-rate preemption for loans to residents, signaling a major 2027 fight for out-of-state banks and their fintech partners.
A New York state senator has introduced legislation that would opt the state out of the Depository Institutions Deregulation and Monetary Control Act of 1980 (DIDMCA). This federal law allows federally insured, state-chartered banks to charge interest at rates permitted by their home state, regardless of the borrower's location. The bill would subject consumer loans "made" in New York to the state's own interest-rate limits, including its 25% criminal usury cap.
This matters because New York is the nation’s fourth-largest state, and its withdrawal from the DIDMCA framework would substantially increase regulatory risk for interstate lending programs, particularly those involving fintech partners. The bill broadly defines a loan as being "made" in New York if the borrower is a resident, a definition that is already the subject of federal litigation concerning opt-out laws in Colorado and Oregon.
While this specific bill will not become law—it was introduced after the legislature's 2026 session ended—it is expected to be reintroduced in January 2027. Counsel should monitor this effort and parallel litigation, such as the Tenth Circuit's en banc review in National Association of Industrial Bankers v. Weiser, which will shape the future of interstate lending.