New York moves to opt out of DIDMCA preemption as House weighs opposite bill
A New York Senate bill would invoke DIDMCA Section 525 to block federal interest-rate preemption for in-state consumer credit transactions, while H.R. 7866 would narrow state opt-outs to only in-state chartered lenders.
New York Senate Bill S10688, introduced August 26, 2026, would exercise the state's DIDMCA Section 525 opt-out for covered consumer credit transactions, excluding first-lien mortgages and federally chartered institutions. It defines a transaction as made in New York when the consumer is solicited, applies, receives funds, or is collected from in the state, and carries civil penalties up to $2,500 per violation or $10,000 for knowing violations, enforceable by the superintendent and the attorney general. The bill would take effect 180 days after enactment. Simultaneously, the House Financial Services Committee on September 2 held a hearing on H.R. 7866, the American Lending Fairness Act of 2026, which would repeal Section 525 and limit state opt-outs to institutions chartered by that state, preserving parity with out-of-state chartered banks. Sophisticated counsel should track whether New York's broad solicitation-based nexus definition survives enactment, how courts treat overlapping state and federal preemption claims, and the trajectory of H.R. 7866, since the two measures pull federal interest-rate authority in opposite directions for major consumer lenders, fintechs, and bank-nonbank partners.