Two senators plan to introduce a bill on Tuesday to impose a tight cap on credit card interest rates, reviving a proposal that is sure to draw howls from banks and other lenders.
A lid on credit card rates has been a white whale of sorts for consumer advocates and others for generations, with efforts falling short during the administrations of Presidents George H.W. Bush and Barack Obama. The idea received new life in September when President Trump, then on the campaign trail, said he supported a temporary 10 percent limit on credit card rates “while working Americans catch up.”
That exact cap is contained in Tuesday’s legislation to amend the 1968 Truth in Lending Act, proposed by two senators who aren’t typically ideological allies: Bernie Sanders, the Vermont independent, and Josh Hawley, Republican of Missouri. Both separately participated in earlier attempts to impose a cap.
The average credit card interest rate is now more than 20 percent, according to Bankrate. The metric has risen over the past decade; at 22.8 percent in 2023, credit card companies were charging their highest rates since the Federal Reserve began collecting data in 1994.
The new limit would expire in 2031, after Mr. Trump’s term. The White House did not respond to a request for comment on whether the administration would back it.
“We cannot continue to allow big banks to rip off Americans by charging outrageously high credit card interest rates,” Mr. Sanders said in a statement. Mr. Hawley, who has fashioned himself a populist on economist issues, described current interest rates as “exploitative.”
The proposal can be counted on producing a dim response from the banks and the credit card industry. Bank lobbyists came out hard against Mr. Trump’s remarks last year, arguing that they need to charge fees high enough to recover losses from borrowers who don’t pay back their loans.
The American Financial Services Association, a trade organization for credit card issuers, has said rate caps are “unworkable” and “actually harm the consumers policymakers are trying to help, by limiting the types of credit tens of millions of Americans depend on more than ever.”
Republican and libertarian policymakers and researchers have tended to agree.
As ever with Mr. Trump, however, traditional boundaries may not hold. The Treasury secretary, Scott Bessent, was asked during his confirmation hearing last month if he would support a cap on credit card interest rates.
He did not commit to a position, saying he would back whatever Mr. Trump decided.
