NY Bill Targets Interest Rate Exportation by Out-of-State Banks
A New York bill would opt the state out of the federal DIDMCA law, aiming to apply its own usury caps to loans made to residents by out-of-state, state-chartered banks.
A New York state senator has introduced legislation that would opt the state out of the Depository Institutions Deregulation and Monetary Control Act (DIDMCA), a key federal law allowing state-chartered banks to export their home-state interest rates nationwide. Although the bill cannot pass in 2026 because it was filed after the legislative session ended, it is expected to be reintroduced in January 2027, representing a significant escalation in the battle over federal preemption of state usury laws. If passed, the law would subject loans to New York residents by out-of-state banks to New York’s own interest-rate caps, including its 25% criminal usury ceiling. This could severely disrupt established interstate consumer lending models, particularly bank-fintech partnership programs. The bill's broad definition of a loan "made in" New York is already being contested in federal courts challenging similar opt-out laws in Colorado and Oregon. Financial institutions with national lending programs should monitor the bill's reintroduction and the progression of related cases.