Sen. Josh Hawley partners with Sen. Bernie Sanders to tackle credit card rates
Caroline MolloySens. Josh Hawley, R-MO, and Bernie Sanders, I-VT, introduced a bipartisan bill Tuesday that would cap credit card interest rates at 10%.
President Donald Trump first said he backed a 10% cap during his campaign in September, which invited support from Republicans and Democrats alike.
The proposed bill comes after a steady rise in credit card interest rates. According to a Forbes report, the average rate is now 28.61%.
“When large financial institutions charge over 25 percent interest on credit cards, they are not engaged in the business of making credit available. They are engaged in extortion and loan sharking,” Sanders said in a statement Tuesday.
He continued: “We cannot continue to allow big banks to make huge profits ripping off the American people. This legislation will provide working families struggling to pay their bills with desperately needed financial relief.”
Both Hawley and Sanders have campaigned to cap credit card interest rates before.
Hawley, a leading conservative voice and advocate for the unborn, introduced a similar bill in September 2023.
The bill, which died in a previous session of Congress, aimed to cap rates at 18% by amending the Truth in Lending Act.
According to The New York Times, in 2023, “credit card companies were charging their highest interest rates since the Federal Reserve began collecting data in 1994.”
The average interest rate in 2023 was 22.8%, substantially lower than the rate in the most recent report.
However, the American Financial Services Association (AFSA) has held that rate caps do not work.
AFSA claimed in September: “The facts on rate caps of any kind are clear: they 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.”
When asked about endorsing the proposed cap on credit card rates, Treasury Secretary nominee Scott Bessent acknowledged that many credit card companies “have been bad actors throughout history” and pledged to back Trump’s decision on the matter.