WASHINGTON—President Donald Trump last week urged credit card issuers to adopt a one-year 10% interest-rate cap on credit cards beginning Jan. 20, framing the move as part of a broader effort to address affordability pressures.
Since the announcement, America’s Credit Unions said its advocacy team has been working with state leagues and other financial-services trade groups to engage Administration officials and members of Congress on what it warned could be significant unintended consequences.
As of 7 a.m. ET Wednesday, Jan. 21, there has been no legislative or administrative action to implement the proposed cap, and no clear enforcement mechanism has been identified, the trade group said.
Trump is scheduled to address the World Economic Forum in Davos, Switzerland, on Wednesday. America’s Credit Unions said it is closely monitoring his remarks and stands ready to respond to any new signals regarding the rate-cap proposal, pledging to keep member credit unions informed in real time.
The organization emphasized that affordability is already a core focus for credit unions and urged Washington policymakers to work collaboratively with the industry on solutions that do not restrict access to credit or harm the broader economy.
In a recent Open Banker op-ed, Scott Simpson, president and CEO of America’s Credit Unions, warned that a rigid rate cap could push subprime and lower-income borrowers out of the mainstream credit system and toward riskier alternatives, while also weighing on consumer spending.
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 the Grassroots Action Center. Credit union-specific talking points for staff and boards are available in the Member Activation Program (MAP) Campaign Resource Center, ACU noted.