10% Cap on Credit Cards Would Harm Credit Unions, Consumers

On Friday, President Trump announced on social media his support for a nationwide 10% cap on credit card interest rates. Supporters argue the move would bring relief to struggling consumers. But those of us in the credit union industry – and the wider financial services industry – know that the unintended consequences could be severe, especially for those who rely on credit the most.

Credit union leagues and system partners activated quickly. In a letter to the president, America’s Credit Unions President/CEO Scott Simpson said the proposal risks cutting off access to credit for millions of Americans, particularly subprime and near-prime borrowers.

“Credit unions share the goal of affordability,” Simpson wrote. “But the overwhelming evidence points to the conclusion that a 10% cap would inadvertently drive vulnerable consumers toward predatory alternatives.”

Simpson pointed to Federal Reserve data showing that 37% of Americans would struggle to cover a $400 emergency expense, making access to responsible credit essential, not optional. A rigid pricing cap, he argued, could force lenders to tighten underwriting standards and raise fees, leaving fewer safe options for consumers in financial distress.

On the operational side, WEOKIE Federal Credit Union President/CEO Jeff Carpenter emphasized that government-imposed pricing rarely delivers its intended outcomes.

“Eventually, those that most need access to this form of credit will be cut off,” Carpenter told CUToday this week.

He also pointed to past regulatory efforts, such as the Durbin Amendment and proposed overdraft fee caps, as examples of well-intended policies that produced mixed results.

“At WEOKIE, our unique structure drives everything we do,” Carpenter said. “We focus on charging as little as possible on loans, paying as much as possible on deposits, keeping fees low, covering our costs, and maintaining strong reserves to protect our member-owners.”

The Electronic Payments Coalition (EPC) recently issued guidance warning that proposed credit card interest rate caps could eliminate access to credit for an estimated 175–190 million Americans—nearly 90% of all cardholders. The most affected groups would include low-income households, young workers, and small businesses.

“A one-size-fits-all government price cap may sound appealing, but it wouldn’t help Americans—it would do the exact opposite,” said EPC Executive Chairman Richard Hunt. “It would harm families, limit opportunity, and weaken our economy. Credit cards are often the first and most important tool young people use to build a credit history, and they serve as a critical financial lifeline for low- and moderate-income households facing emergency expenses.”

“History shows that government price controls don’t make costs disappear,” Hunt added. “They reduce access, push consumers out of safe, regulated credit, and leave the very people they claim to help with fewer options when they need them most.” 

The debate isn’t about defending high rates: it’s about preserving access, flexibility, and responsible risk management.

“Affordability matters,” Simpson said. “But so does access. And the two can’t be separated.”

Legal experts remain skeptical that a president could impose such a cap without congressional approval, and bipartisan legislation proposing a 10% ceiling faces an uncertain path. Still, the political pressure is real, fueled by rising household debt and public frustration with high interest rates.

Greg Mesack of America’s Credit Unions offered sage guidance to credit unions this week. “You’re not required to lower your rates based on a social media post,” he said. “You’re not required to take action unless you get guidance from a regulatory body based on statutes. Nothing’s been actually published yet.” 

Durbin and Marshall Resurrect Long-Stalled CCCA

Within hours of the president’s announcement on Truth Social, U.S. Sen. Roger Marshall of Kansas said he will help carry out rate cap legislation. On Tuesday, Marshall and Sen. Dick Durbin formally reintroduced the Credit Card Competition Act, a long-stalled bill which the credit union movement has ardently opposed. 

Contract lobbyist John McKechnie told CUToday.info that the reintroduction marks a pivotal moment for credit unions as the debate intensifies.

“After the events of the last couple days it's not surprising to see CCCA reintroduced,” he said. “Everybody in Washington knew this was coming, or at least they should have. The question for credit unions is: What do we do now that there appears to be a full-frontal assault on credit card revenue? My first suggestion is that we must be even more assertive in telling the real truth about these price caps. They don’t withstand scrutiny when you hold them up to the light of day. Consumers won’t benefit, and in fact there will be real damage done if Congress goes down this road.”

Make Your Voices Heard

America’s Credit Unions issued an action alert Tuesday morning urging members to visit the ACU grassroots action center (log in required) and express their opposition to the rate cap. Lawmakers need to understand how critical it is to keep credit accessible and affordable for American consumers.