In a collective statement, the American Bankers Association (ABA), Bank Policy Institute, Consumer Bankers Association, Financial Services Forum, and Independent Community Bankers of America acknowledged the aim of making credit more affordable but warned that the proposed cap could negatively impact consumers.
What did the banking groups say?
The banking associations asserted that a 10% interest rate cap would restrict credit availability and could be “devastating” for numerous families and small businesses reliant on credit cards.
They cautioned that such a cap might compel consumers to seek less regulated and more costly alternatives.
“We share the President’s aim of providing Americans access to more affordable credit,” the statement highlighted. “However, evidence suggests that a 10% interest rate cap would hinder credit availability and be catastrophic for millions of American families and small businesses who depend on and appreciate their credit cards.”
The groups expressed their willingness to collaborate with the administration to ensure that Americans continue to have access to essential credit.
What is Trump proposing?
On January 9, President Trump revealed his intention to impose a temporary 10% cap on credit card interest rates for a year. He noted that many credit card companies currently charge rates between 20% and 30% or more.
Trump stated that the cap would come into effect on January 20, 2026.
Why is this proposal important?
This proposal revives a commitment Trump made during his 2024 election campaign. Although similar concepts have been considered in Congress previously, no law establishing a cap on credit card interest rates has been enacted so far.
The White House has yet to disclose information regarding how the cap would be enforced or implemented.
How have others reacted?
Major US banks and credit card issuers, including American Express, Capital One Financial, JPMorgan, Citigroup, and Bank of America, have not provided immediate comments on the announcement.
Billionaire investor Bill Ackman criticized the proposal, stating that capping rates might lead lenders to cancel credit cards for millions, forcing them to seek alternative forms of credit.
(Edited by : Priyanka Deshpande)
