House committee advances ABA-backed bills on state lending rate caps, CFPB reform

The House Financial Services Committee voted 31-18 to advance the American Lending Fairness Act (H.R. 7866), legislation that would prevent states from imposing interest rate caps on loans from out-of-state state-chartered banks and credit unions. The committee also voted 28-21 to advance the Consumer Financial Protection Accountability and Reform Act of 2026 (H.R. 10184), which would change how the Consumer Financial Protection Bureau is funded and redefine its ability to regulate unfair, deceptive, or abusive acts or practices, or UDAAP.

The lending bill, introduced by Rep. Warren Davidson (R-Ohio), targets the federal Depository Institutions Deregulation and Monetary Control Act, or DIDMCA. Under current law, states can opt out of DIDMCA to establish restrictions on loans made by state-chartered banks. The American Bankers Association joined nearly a dozen financial sector associations in supporting the bill, arguing that Colorado and Oregon's use of the opt-out "directly contravenes Congress' original, limited intent." A companion bill was introduced in the Senate by Sen. Bernie Moreno (R-Ohio). The CFPB reform bill would subject the bureau to congressional appropriations instead of funding requests from the Federal Reserve, and would require the CFPB to more clearly define the "abusive" standard while barring it from interpreting UDAAP to include discriminatory practices.

The committee's actions signal momentum for a dual banking system framework that limits state authority over out-of-state lenders. Supporters argue the lending bill would preserve parity between national and state lending institutions and provide certainty that the dual banking system is preserved. The CFPB changes, backed by Republicans, are framed as making the bureau more accountable to elected officials. The committee also advanced two other ABA-supported bills: the Civil Investigative Demand Reform Act (H.R. 1653) by a 29-20 vote, and the Taskforce for Recognizing and Averting Payment Scams, or TRAPS, Act (H.R. 4936) by a unanimous vote.

What remains unknown is whether the full House will take up the measures and whether the Senate companion bill will advance. The ABA Banking Journal report does not specify a timeline for floor votes or indicate whether the legislation has sufficient support to overcome potential opposition in the Senate or a presidential veto. The practical effect on state-chartered lending and CFPB enforcement authority will depend on final legislative language and any amendments adopted during subsequent consideration.