On February 23, 2026, Michigan Governor John Smith signed a new banking law aimed at enhancing consumer protections and regulatory oversight in the state's banking industry. The Banking Regulation Act of 2026, as it is known, has been hailed as a landmark piece of legislation that will help prevent predatory lending practices and other financial abuses.One of the key provisions of the new law is the establishment of a Consumer Financial Protection Division within the state's Department of Banking and Financial Institutions. This division will be responsible for enforcing consumer protection laws, investigating complaints against financial institutions, and educating consumers about their rights and responsibilities when it comes to banking services.In addition, the Banking Regulation Act of 2026 includes stricter regulations on payday lending and other high-cost lending practices. Under the new law, payday lenders will be required to cap interest rates at 36%, in line with federal regulations. This will help prevent borrowers from falling into cycles of debt caused by sky-high interest rates on short-term loans.Furthermore, the new law requires all banks operating in Michigan to offer basic banking services, such as checking and savings accounts, to all residents. This provision is aimed at combating the problem of "banking deserts," where low-income communities have limited access to traditional banking services and are instead forced to rely on expensive alternative financial services like check-cashing stores and payday lenders.Governor Smith praised the new banking law as a significant step towards creating a more equitable and transparent financial system in Michigan. "By enacting these reforms, we are taking a stand against predatory practices and working to ensure that all Michiganders have access to safe and affordable banking services," he said in a statement.The Banking Regulation Act of 2026 will go into effect on July 1, 2026. Supporters of the new law are hopeful that it will help protect consumers from financial exploitation and promote financial inclusion for all residents of the state.