President Donald Trump’s push to make life more affordable by capping credit card interest rates at 10 percent for one year and endorsing the Credit Card Competition Act faces steep opposition from his own party and Wall Street, creating an election-year clash over his populist agenda.
While Trump announced the proposals Friday and Tuesday respectively, House Speaker Mike Johnson urged people not to “get too spun up about” the ideas, and Senate Majority Leader John Thune said rate caps are “not something I’m out there advocating for,” with multiple Republican lawmakers warning of unintended consequences like reduced credit availability for consumers.
One anonymous House Financial Services Committee Republican called the rate cap “horrible policy,” arguing companies would become “much more selective about just taking the cream of the crop, and folks that actually really need credit are not going to be able to get it anywhere.” Banking groups and JPMorgan Chase CFO Jeremy Barnum have warned the proposals would hurt consumers through reduced credit access and fewer rewards, though some Republicans like Sen. Josh Hawley support the effort, saying “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.”
Sen. Elizabeth Warren, who spoke with Trump Monday, promised congressional help “if he will actually fight for it,” while Sen. Roger Marshall joined Democrat Dick Durbin in reintroducing the Credit Card Competition Act, though any legislation would likely need approval from Senate Banking Chair Tim Scott, who previously opposed similar consumer protection rules. The administration could potentially pursue regulatory action through the Consumer Financial Protection Bureau without Congress, according to former CFPB adviser Brad Lipton, who noted “high interest rates could be considered abusive,” though such moves would contradict Trump’s goal of dismantling the agency and face legal challenges.