Trump calls on Congress to enact 10% APR cap for one year
Speaking at the World Economic Forum Wednesday, President Donald Trump called on Congress to enact a 10% credit card interest rate cap for one year. This is a change from his previous statements, where he urged credit card companies to impose the cap and implied the administration would enforce it.
“While credit unions uphold a shared desire with the President to make life more affordable for American households, a one-year, 10% government induced cap on credit card interest rates would have the opposite effect on affordability for many consumers. Experience shows that rigid and arbitrary rate caps do not lower costs, they restrict access to affordable products for families who need them the most,” said Scott Simpson, America’s Credit Unions president/CEO.
“As Congress considers this proposal, lawmakers should reject a policy that would shrink access to credit and harm the very families it aims to help. Instead of advancing a rate cap that risks cutting consumers off from credit, the public would benefit if Congress focused on expanding access to institutions that already deliver affordability and financial stability for more than 145 million Americans: credit unions.
“There is already a proven, market-based model delivering affordability at scale for American households. Credit unions are member-owned, not-for-profit community-focused institutions that price credit to serve people, not maximize profits. They operate under existing statutory limits and consistently offer lower rates without government mandates.
“From their onset, credit unions were built to serve consumers first, and that purpose continues to translate into real financial benefits for millions of Americans. Every day, credit unions deliver lower borrowing costs and real savings, with credit card rates that are significantly below market averages and meaningfully reduce the cost of credit for working families,” concluded Simpson.
Credit unions strongly oppose such a cap, and America's Credit Unions and state leagues are closely engaged with policymakers and credit unions, emphasizing that credit unions are a solution to affordability issues facing American families. Simpson detailed the many consequences of such a cap in an op-ed published last week.
A targeted call to action is underway by America's Credit Unions and leagues. Currently, only credit union leaders/advocates are asked to send messages to Congress at this time.
The rate cap action alert is available in America’s Credit Unions’ Grassroots Action Center. The Member Activation Program Campaign Resource Center has credit union-specific talking points for staff and boards on rate caps.