A new bipartisan proposal in Congress aims to preserve lending authority for state-chartered credit unions and banks after a state law raised concerns about access to credit nationwide.
Sen. Bernie Moreno (R-Ohio) and Rep. Warren Davidson (R-Ohio) introduced the American Lending Fairness Act of 2026, legislation designed to clarify the Depository Institutions Deregulation and Monetary Control Act (DIDMCA) and protect the ability of state-chartered institutions to export interest rates across state lines.
Under DIDMCA, enacted in 1980, state-chartered financial institutions may apply the interest rate permitted in their home state to borrowers elsewhere. Supporters said a 2023 Colorado law undermines that framework by imposing Colorado rate caps on out-of-state lenders while federal credit unions and national banks remain exempt, creating an uneven playing field.
In a letter backing the bill, multiple financial trade associations warned the state's interpretation could reduce credit availability and harm consumers who rely on short-term lending. "Colorado's proposed interpretation … presents immense threats to American consumers, small businesses, and the institutions that serve them," the groups wrote.
America's Credit Unions President/CEO Scott Simpson said the measure would streamline rules and reduce costs for borrowers by allowing credit unions to focus resources on lending rather than regulatory complexity.
Supporters argued the legislation restores Congress's original intent to prevent discrimination against state-chartered institutions and maintain competition in consumer lending. Without clarification, trade groups saidother states could adopt similar rules, potentially restricting small-dollar loans, credit cards and other financing options for higher-risk borrowers nationwide.
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