These are the most important state-level elections for banks

• Key insight: Races in finance-heavy and populous states like California and New York will have an outsize impact on the financial industry. 
• What's at stake: Particularly pertinent state-level issues for banks include regulating prediction markets, fee and interest rate limits and consumer protection laws. 
• Forward look: Most of the elections in states with important races favor Democrats, but a number of races are competitive.  

WASHINGTON — President Donald Trump has upended the conventional wisdom about the federal role in consumer protection, and so — at least for the next two years — a greater share of that burden is falling to the states.  

A number of state and even municipal authorities have challenged some of the consumer protection and fair lending moves by the administration, making the outcomes of certain attorney general races particularly relevant to banks. 

Likewise, several state laws — including one barring swipe fees on taxes and tips passed by Illinois and a similar one narrowly rejected in Colorado — demonstrate how state legislature and gubernatorial races are playing an outsize importance. 

Here's some of the most important statewide races across the country that could matter for bankers in 2026. 

New York

The New York Governor's office has long been the most important gubernatorial seat for banking, owing to the state's status as the home to Wall Street and the epicenter of global finance and thus the primary regulator of those institutions and markets. Statewide offices in New York are always an important one, but this year's state races are particularly important. 

Gov. Kathy Hochul, a Democrat, currently leads Republican Bruce Blakeman by 10 points, according to the latest Siena Poll. That's a wide margin, but narrower than the 20-point advantage Hochul held in June. While New York remains socially liberal, the state can swing rightward based on the financial fortunes of the state, since it's so closely tied to its economy. 

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Hochul has taken an aggressive position against predictions market operator Kalshi, joining Attorney General Letitia James in challenging the company's operations in New York. James has been among the country's most aggressive state financial enforcers, particularly around consumer protection, scams and even payment providers. 

James herself is seeking a third term against Republican Saritha Komatireddy, a former federal prosecutor. The race is considerably less competitive: the latest Siena poll put James ahead 54% to 36%. 

California

Democrats Jane Kim and state Sen. Ben Allen are competing to replace Ricardo Lara as the state's top insurance regulator. 

The race is consequential because California's property-insurance market is facing an underwriting crisis after staggering losses in recent years from wildfires, causing premiums to become unaffordable for many — or unavailable at any price in certain high-risk areas. 

Kim has advocated a larger state role, including a public disaster insurance model and changes to the state's insurance system. Allen has taken a more incremental approach, emphasizing wildfire mitigation, insurer accountability and reforms to the state's Fair Access to Insurance Requirements Plan, which has warned against its ability to continue paying out its claims. 

The race is competitive — both candidates are Democrats — and the winner will have substantial discretion over how California balances consumer protections against insurers' willingness to remain in the market.

Arizona

Democratic Gov. Katie Hobbs is seeking reelection against Republican Rep. Andy Biggs. Arizona, under Hobbs' leadership, has been one of the leading skeptics of the emerging prediction market industry.  She issued an executive order in July prohibiting state executive-branch employees from using nonpublic government information to trade on platforms such as Kalshi and Polymarket. A recent poll has Hobbs beating Biggs by 8 points.

Arizona Attorney General Kris Mayes, a Democrat, has separately brought a criminal case against Kalshi, making the state one of the more aggressive jurisdictions in challenging the platforms. Biggs has not outlined a position on the financial firms. Mayes is running against Republican challenger and real estate broker Warren Petersen, and is currently leading him in polling by 6 points.

Texas

Texas has two races that could be particularly consequential for financial companies. Gov. Greg Abbott, a Republican, faces Democrat Gina Hinojosa in a race that has tightened considerably. Abbott would offer continuity for Texas' generally business-friendly regulatory approach, while Hinojosa could bring a more consumer-oriented administration. 

The race also has implications for Texas' growing fintech, crypto and technology sectors.

The Texas attorney general's race is even more competitive. Republican state Sen. Mayes Middleton is facing Democratic state Sen. Nathan Johnson, with a July poll showing Middleton at 39% and Johnson at 38%. Johnson has proposed an "AI audit" of Texas laws governing consumer protection and fair competition, arguing that states need to take on more of the work abandoned by the federal government. Middleton would represent continuity with the state's Republican leadership.

Colorado

Colorado's governor's race is relevant to financial firms because Gov. Jared Polis, a Democrat who is term-limited, vetoed legislation this year that would have prohibited credit- and debit-card networks from collecting interchange fees on the portion of transactions attributable to state and local sales taxes.

The legislation was backed by merchants, which argued that businesses shouldn't pay card-processing fees on taxes they collect on behalf of the government. Banks and payment networks opposed the measure and argued that federal law preempted state restrictions on interchange fees. Polis vetoed the bill in June. The veto makes the governor's race relevant to banks and payment networks even though Polis himself isn't on the ballot.

Democrat Phil Weiser, the state attorney general, won the Democratic nomination after defeating former Sen. Michael Bennet. Republican Victor Marx won the GOP nomination. Weiser is favored in the general election, given Democrats' strength in the state. Republicans have not won the governor's office since 2002.