House Committee Advances Bill to Clarify DIDMCA Opt-Out Provisions
The House Financial Services Committee approved H.R. 7866 to clarify DIDMCA opt-out rules.
Why it matters: Legal professionals working on data privacy and digital identity management must monitor this bill. It affects state opt-outs under DIDMCA, impacting compliance and consumer rights in digital identity and lending.
- H.R. 7866, the American Lending Fairness Act of 2026, was approved by the House Financial Services Committee on Sept. 16, 2026.
- The bill clarifies state opt-outs under Section 525 of the Depository Institutions Deregulation and Monetary Control Act (DIDMCA).
- The vote was 31-18, with all Republicans and three Democrats voting in favor.
- The bill would repeal DIDMCA Section 525 and amend the Federal Deposit Insurance Act to allow states to opt out of federal interest-rate preemption for state-chartered banks and credit unions.
On September 16, 2026, the House Financial Services Committee approved H.R. 7866, known as the American Lending Fairness Act of 2026, introduced by Reps. Warren Davidson (R-Ohio) and Andy Barr (R-KY).
The legislation aims to clarify the effect of state opt-outs under Section 525 of the Depository Institutions Deregulation and Monetary Control Act of 1980 (DIDMCA). Currently, DIDMCA allows state-chartered banks and credit unions to export the interest rates permitted by their home states when lending to borrowers in other states. However, Section 525 permits states to opt out of this preemption, creating legal ambiguity.
The committee voted 31-18 in favor of the bill, with all Republicans and Democrats Joyce Beatty (D-Ohio), Bill Foster (D-Ill.), and Brad Sherman (D-Calif.) supporting it. The approved bill included technical, non-substantive amendments before the vote.
The legislation proposes to repeal DIDMCA Section 525 and amend Section 27 of the Federal Deposit Insurance Act. This change would formally allow states to opt out of federal interest-rate preemption for loans made by institutions chartered by those states, thus clarifying the legal landscape for market participants.
House Financial Services Committee Chairman French Hill emphasized the bill's goal: "This legislation is intended to restore interest-rate exportation parity between state-chartered and national banks." This parity could significantly affect lending practices and regulatory compliance related to digital identity management and consumer protection.
A companion bill, introduced by Senator Bernie Moreno (R-Ohio) in the Senate, has yet to receive committee consideration or floor action.
Legal teams in corporate and financial sectors should monitor the bill’s progress, as it may impact litigation risks and compliance strategies in digital identity and lending services.
By the numbers:
- 31-18 — committee vote in favor of H.R. 7866
- 3 — Democrats voting in favor (Beatty, Foster, Sherman)
- September 16, 2026 — date of committee approval
Yes, but: The bill includes only technical, non-substantive amendments; specifics on these changes are not disclosed.
What's next: The full House of Representatives has not scheduled a vote on H.R. 7866. The Senate companion bill awaits committee action.