WASHINGTON — President Donald Trump on Friday renewed a campaign promise to cap credit card interest rates, calling for a one-year limit of 10% beginning Jan. 20, though he offered no details on how such a cap would be enforced or implemented, Reuters reported.
In a post on Truth Social, Trump said he was “calling for a one-year cap on credit card interest rates of 10%,” arguing that consumers have been unfairly treated by credit card companies. The White House echoed the claim on social media but did not provide additional guidance, and did not immediately respond to Reuters’ request for clarification, the news outlet said.
Analysts have long said any such cap would require congressional action. While lawmakers in both parties have expressed concern over high credit card rates, Republicans hold narrow majorities in both chambers, and no legislation establishing a 10% cap has been enacted, Reuters noted.
Several bipartisan proposals already exist. Senators Bernie Sanders and Josh Hawley have introduced legislation that would impose a 10% cap for five years, while House members Alexandria Ocasio-Cortez and Anna Paulina Luna have offered a similar measure. Trump did not explicitly endorse any of those bills in his post.
The announcement drew criticism from both Democrats and market participants. Billionaire investor Bill Ackman, who backed Trump in the election, called the proposal a “mistake,” warning that lenders could restrict credit access. Major card issuers, including JPMorgan Chase, Capital One, American Express, Citigroup and Bank of America, did not immediately comment, Reuters said.
DCUC Responds
Defense Credit Union Council Chief Advocacy Officer Jason Stverak noted that credit unions already operate under a statutory interest-rate cap that is significantly lower than what applies to banks and many other financial institutions.
"That cap has existed for decades and reflects the credit union mission of putting people over profits—not maximizing shareholder returns," Stverak said. "DCUC has a well-documented history of opposing blanket interest-rate cap proposals, including similar 10% caps raised in the past year. While these ideas are often well-intentioned, our concern has consistently been that a federally imposed 10% cap would produce serious unintended consequences—particularly for military families and working Americans who rely on credit unions for responsible, affordable access to credit."
Jason Stverak
Stverak said a rigid cap would likely reduce access to credit by limiting credit unions’ ability to serve higher-risk borrowers.
"Many credit unions would be forced to tighten underwriting standards or scale back credit card and small-dollar lending altogether," he said. "That outcome would disproportionately affect young servicemembers, junior enlisted personnel, and lower-income members who do not yet have prime credit profiles."
For military communities, the impact would be especially severe, Stevrak said.
"Defense credit unions routinely provide small-dollar loans, emergency credit, and short-term financial relief to servicemembers facing unexpected expenses. Under an arbitrary 10% cap, many of these critical services could become unsustainable," he explained. "As DCUC has emphasized, military families deserve policies that strengthen their financial security—not policies that unintentionally jeopardize it by limiting access to trusted, affordable credit."
There is also a real risk, Stverak added, that restricting credit union lending would push vulnerable consumers toward predatory lenders.
"Limiting the ability of mission-driven institutions to price loans according to risk does not eliminate the need for credit; it simply shifts that need into less regulated, higher-cost alternatives outside the credit union system," he contended. "Finally, interest-rate cap proposals threaten the broader service model that defense credit unions provide. Beyond lending, our credit unions deliver financial counseling, fraud protection, deployment-related assistance, and tailored relief products for servicemembers and their families. A one-size-fits-all cap could undermine the sustainability of those services."
Rather than imposing a blanket national cap, Stverak said DCUC has urged policymakers to pursue more targeted consumer protections—expanding financial education, promoting responsible lending, and directly cracking down on predatory actors.
"We look forward to working with Congress and the Administration to highlight the indispensable role credit unions play in supporting financial readiness for our armed forces and the hard-working American worker, while ensuring policy solutions do not penalize the institutions that have consistently put people first,” Stverak said.
=================================================
Remember, you're not alone with NCOFCU.org
|
Comments
Post a Comment
Please no profanity or political comments.