By Ray Birch
WASHINGTON—If a nationwide 10% cap on credit card interest rates were ever imposed, the effects would ripple far beyond monthly statements, reshaping who can access credit, how banks and credit unions price risk, and even how consumers spend money across the economy.
But while President Trump’s renewed call for such a cap has reignited debate on Capitol Hill, legal experts, regulators, and industry leaders say the path from proposal to enforceable law is anything but clear—and could take a great deal of time—if it happens at all.
For issuers, the immediate economic impact would be severe. Credit card portfolio expert Tim Kolk, principal of TRK Advisors, said the current system simply cannot absorb such a dramatic cut in pricing.
The average interest rate paid by revolving cardholders is about 23%, while credit card programs typically generate returns of roughly 4%. Slashing rates by more than half would render most existing products unsustainable, he said, eliminating rewards cards, forcing the return of widespread annual fees, and sharply tightening underwriting.
Tim Kolk
“If a 10% rate cap was actually implemented on credit cards the impacts would be unprecedented,” Kolk said, warning that millions of consumers would no longer qualify for cards at all. The downstream effects would include collapsing balances, falling purchase volumes, and job losses across card operations, airlines, hotels, payment networks, and processors. “The whole ecosystem would be rocked and changed forever,” he said.
Despite the magnitude of those potential consequences, significant questions remain about whether—and how—the proposal could become law. Former NCUA Chairman Dennis Dollar said the President lacks unilateral authority to impose a nationwide rate cap.
“The President cannot set interest rates on a credit card any more than he can set the Fed funds rate,” Dollar said. Any binding cap, he added, would require congressional action, and lawmakers have shown little appetite for federal price controls on consumer financial products.
Dennis Dollar
“Whereas the President may generate some discussion and the resultant attention could help hold credit card interest rates down through his use of the President’s bully pulpit, the reality is that Congress has shown no appetite to get into federal price fixing on credit cards,” Dollar stated. “Heck, they just voted down the CFPB’s price fixing on overdraft fees. Other than some media and maybe congressional discussion about where the proper risk management equilibrium should be on credit card interest rates driven by the Elizabeth Warrens of the world—and even she is unlikely to support a Trump proposal—I don’t see this proposal going anywhere.”
Existing Statutes Offer Little Support
That skepticism is echoed by America’s Credit Unions, which is closely evaluating the legal framework.
Ann Petros, ACU’s vice president of policy engagement and credit union operations, said existing statutes offer little support for unilateral executive action. The CARD Act, she noted, governs disclosures and rate changes but does not authorize interest-rate ceilings. Even if an administration attempted to act through the Consumer Financial Protection Bureau, Petros said, decades of case law suggest a cap imposed without Congress would be on shaky ground.
“We’re evaluating whether there is any legal basis for an Executive Order or other executive or administrative action without legislative approval. At this point, we’re not aware of any legal theory that would allow the President to take this action on his own,” Petros stated.
Typically, an executive order implements an existing law—it does not create new law or override statutes passed by Congress. Instead, it directs federal agencies to act within the bounds of existing authority, such as changing an interpretation or the way a law is administered, Petros explained.
Ann Petros
“There are decades of case law and legal analysis on the scope of presidential and executive-branch authority,” she said. “While not focused specifically on credit card interest rates, that body of law offers little support for the idea that the President has the authority to impose a cap unilaterally. We’ll continue to evaluate the issue, but at this point, that authority does not appear to exist.”
Still, the political pressure is real—and bipartisan. Credit card debt topped $1.1 trillion during Trump’s campaign and reached $1.17 trillion by the third quarter of 2024, according to reporting by The Guardian. In early 2025, Senators Bernie Sanders and Josh Hawley introduced legislation to cap credit card rates at 10% for five years, arguing that rates exceeding 25% amount to “extortion and loan sharking.”
Warren Dismisses Trump’s Proposal
Sanders’ long-standing position complicates partisan lines, analysts stated, even as Senator Elizabeth Warren dismissed Trump’s proposal as symbolic.
“Begging credit card companies to play nice is a joke,” Warren said, adding that only legislation could make a cap meaningful.
Jason Stverak
Defense Credit Union Council Chief Advocacy Officer Jason Stverak said Congress, not the White House, is likely to determine what happens next. While Trump could issue an Executive Order signaling support, Stverak said any enforceable cap would require lawmakers to act, potentially by attaching amendments to must-pass bills such as spending packages or digital assets legislation.
Even then, he warned, such efforts would face procedural hurdles and near-certain court challenges from major issuers.
One possible path, Stverak noted, would be for lawmakers to attempt to attach a rate-cap amendment to must-pass legislation, such as a spending bill or a high-profile package like digital assets legislation currently moving through the Senate Banking and Senate Agriculture committees. He cautioned, however, that such an amendment could be ruled out of order and would face procedural hurdles.
Stverak said senators could also file amendments without necessarily forcing a vote, or wait until a broader floor debate with a more open amendment process. Even if Congress were to act, he said, any effort to impose a cap would almost certainly be challenged in court by major card issuers.
As for the impact on credit unions, Stverak warned a 10% cap would directly affect institutions with significant unsecured lending exposure. Many credit unions currently price credit cards and unsecured loans closer to 18%, he said, and cutting those rates nearly in half would represent a substantial hit to revenue and overall balance-sheet performance.
“That’s a real and significant impact on the bottom line,” Stverak said, adding that credit unions would be forced to reassess how much unsecured credit they can sustainably offer under such a cap.
The Defense Credit Union Council responded within hours of President Trump’s announcement, engaging the media, drafting a letter to the White House, contacting key congressional committees, and distributing member talking points and an op-ed, while warning that a 10% credit card rate cap could sharply limit access to credit for servicemembers and other financially vulnerable borrowers.
Scott Simpson
ACU Letter To Trump
America’s Credit Unions has pushed back, as well. In a letter to President Trump, ACU President and CEO Scott Simpson said credit unions share the goal of affordability but warned a flat cap would reduce access to credit for millions of consumers, especially subprime and near-prime borrowers.
Citing Federal Reserve data, Simpson noted that 37% of Americans would struggle to cover a $400 emergency expense and that many rely on credit cards as a financial lifeline.
“The overwhelming evidence points to the conclusion that a 10% cap would inadvertently drive vulnerable consumers toward predatory alternatives,” Simpson wrote.
ACU also sent an email message opposing the cap to lawmakers Monday.
On the ground, credit union leaders see uneven impacts depending on business models. WEOKIE Federal Credit Union in Oklahoma City sold its credit card portfolio years ago and now partners with Elan, meaning any revenue hit would be limited—but CEO Jeff Carpenter still warned that capped pricing would undermine risk-based lending.
Jeff Carpenter
“Eventually those that most need access to this form of credit will be cut off,” Carpenter said.
Carpenter emphasized that he is against the government establishing pricing on any products or service.
“Whether it be the failed implementation of the Durbin Amendment on debit cards or the proposed CFPB attempt to set caps on overdraft fees,” Carpenter said. “At WEOKIE our unique structure drives everything we do. I wake up every day focused on how we can best serve our member-owners: charging as little as possible on loans, paying as much as possible on deposits, keeping fees as low as possible, covering our costs, expanding services to meet their needs, and maintaining strong reserves to keep their money safe.”
Scott Wilson
In Massena, N.Y., SeaComm FCU CEO Scott Wilson agreed that tighter underwriting and added fees would likely follow, even for institutions already operating under statutory rate caps.
“At first glance, anytime you cap something, the inclination is always to go to ‘there will be less usage,’” Wilson told CUToday.info. “In some instances that may be true. There may be less rewards offered on cards to offset the difference in reduction in interest income. We are already under a regulatory interest rate cap that is lower than banks and credit card companies. Speaking generally, I am concerned there will be a tightening of underwriting that would preclude certain borrowers' access, and we may see the increase of additional fees applied as an offset.
“Whichever the direction, SeaComm will critically evaluate our own card portfolio if this happens and will certainly ensure our members still have access to the card product that they have been accustom,” Wilson concluded.
Payments, Credit Pricing Pressure Intensifying
Brian Scott
For Brian Scott, a payments expert and co-founder of RAI Partners, the debate underscores a broader reality: Pressure on payments and credit pricing is intensifying from both parties.
“If a strict 10% cap were imposed, it wouldn’t make credit cheaper; it would make it unavailable for millions of Americans,” Scott said.
Scott added that such a cap would only create greater need for his company’s services.
“Credit unions need strong partners right now. Even before this proposal, many credit unions were already struggling to underwrite a large share of the credit card applications they receive,” Scott said.
RAI Partners offers to take on the declined credit card applications a credit union doesn’t want to keep on its books.
While Scott doubts a cap that low would endure, he believes some form of regulation is increasingly likely, particularly given bipartisan alignment and past attempts to cap fees.
“At the end of the day, this isn’t just a credit union issue,” Scott reminded. “Leaders across banking and payments—from JPMorgan to Visa and Mastercard—will be deeply involved in shaping the outcome. If a strict 10% cap were imposed, it wouldn’t make credit cheaper; it would make it unavailable for millions of Americans.
John McKechnie
“More likely, if legislation moves forward, it will take time—probably a year or more—and land somewhere higher than a 10% cap,” continued Scott. “Federal credit unions have long operated under an 18% ceiling, and something in that range may be more politically viable. While no one knows exactly where this ends up, the growing bipartisan pressure around payments and credit strongly suggests that some form of regulation is coming.”
Washington credit union advocate John McKechnie shared a similar perspective.
"There's a consensus on Capitol Hill that the president's comments have changed the debate on credit card fees generally. There isn't a consensus, however, as to where the ball will bounce from here," McKechnie told CUToday.info. "Republicans, who are instinctively averse to government intervention in the market, are taking a second look at the issue; one senior Republican Senate Banking Committee staffer said she thought that a few days ago, zero Senate Republicans would vote for any kind of fee caps. Now she says several senators are up for grabs. And it's solely because of the President's statement. That sums up Washington in 2026."