Sens. Bernie Sanders (I-VT) and Josh Hawley (R-MO) introduced a bill on Tuesday aiming to cap credit card interest rates at 10%.
President Donald Trump backed lowering credit card interest rates during his 2024 campaign, and the bill appears to attempt to hold him to his promise.
“When large financial institutions charge over 25 percent interest on credit cards, they are not engaged in the business of making credit available,” Sanders said in a statement. “They are engaged in extortion and loan sharking. We cannot continue to allow big banks to make huge profits ripping off the American people. This legislation will provide working families struggling to pay their bills with desperately needed financial relief.”
If passed, the bill would immediately cap all credit card interest rates at 10% for five years. The senators cited a recent Forbes article showing the average credit card interest rate at 28.6%.
“Working Americans are drowning in record credit card debt while the biggest credit card issuers get richer and richer by hiking their interest rates to the moon. It’s not just wrong, it’s exploitative. And it needs to end,” Hawley said. “Capping credit card interest rates at 10%, just like President Trump campaigned on, is a simple way to provide meaningful relief to working people.”
Hawley introduced a bill during the 118th Congress to cap credit card interest rates at 18%. The bill never made it out of committee. Sanders and Rep. Alexandria Ocasio-Cortez (D-NY) introduced their own bill capping credit card interest at 15% in 2019.
Trump said during a Long Island, New York, rally last year that he would cap interest rates on credit cards.
“While working Americans catch up, we’re going to put a temporary cap on credit card interest rates,” Trump said in September. “We’re going to cap it at around 10%. We can’t let them make 25% and 30%.”
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The American Financial Services Association, a trade association for the consumer credit industry, previously said a cap on interest rates was “unworkable.”
“The facts on rate caps of any kind are clear: they are unworkable and actually harm the consumers policymakers are trying to help, by limiting the types of credit tens of millions of Americans depend on more than ever,” they said. “Several academic studies have proven that the data backs up concerns about rate caps tightening access to credit to the Americans who need it the most.”