Following President Donald Trump’s announcement via Truth Social to cap credit card interest rates at 10 percent for one year, America’s Credit Unions has launched an aggressive advocacy campaign.
The association warns that while the policy — slated for a Jan. 20 effective date — is aimed at affordability, it could inadvertently trigger a massive contraction in consumer credit and destabilize the broader U.S. economy.
The president’s proposal specifically targets “credit card companies that are charging interest rates of 20 to 30%.” In subsequent comments, Trump stated that financial institutions that do not comply with the 10-percent cap could face legal action, though no formal regulatory actions have yet been finalized.
“The plain truth is that capping rates at 10 percent does not make credit more affordable; it makes it unattainable for millions of working Americans,” said Scott Simpson, President and CEO of America’s Credit Unions.
Data provided by the association indicates that approximately 47 million subprime borrowers (one-third of all consumers) would be cut off from mainstream credit cards. Because credit cards are rarely collateralized, the risk of borrower default must be priced into the interest rate.
At a 10-percent ceiling, lenders would likely be forced to tighten underwriting or pull back entirely from higher-risk segments, including members of the military, veterans, teachers, and farmers.
The potential fallout extends beyond individual credit lines. With consumer spending driving roughly 70 percent of U.S. Gross Domestic Product, credit cards are a vital economic engine.
In 2024, purchase volume on consumer credit cards totaled $3.6 trillion, accounting for 12 percent of the total U.S. economy — nearly double the federal government’s contribution. Credit union industry leaders are warning of specific unintended consequences, including:
For many, credit is a lifeline. Federal Reserve data shows that 37 percent of Americans would struggle to cover a $400 emergency expense from income or savings alone. Of those, over 40 percent would rely on a credit card to bridge the gap.
In fact, there are historical precedents. Access to credit was “severely impacted” in other countries and specific U.S. states that have previously imposed similar interest rate caps.
Credit unions have long positioned themselves as the original consumer protectors. As of January 2026, their average interest rate for basic classic cards stood at 12.87 percent, compared to the bank average of 16.07 percent. However, even these mission-driven rates would be illegal under the proposed 10-percent cap.
This is not the first time the industry has faced such proposals. Credit unions successfully advocated against previous legislative efforts to place a 10-percent cap on rates, notably keeping such provisions out of the GENIUS Act.
While firmly opposed to arbitrary price controls, America’s Credit Unions has expressed a willingness to work with the administration and Congress on “targeted, data-driven solutions” to enhance financial resiliency, such as:
As the January 20 deadline approaches, credit union leaders are being mobilized to contact U.S. senators and representatives in Congress, urging them to reject legislation or amendments that would enact arbitrary price controls on the credit cards millions of Americans rely on to make ends meet.
If your credit union would like to be a part of California and Nevada’s Credit Unions’ advocacy and engagement strategy on this issue, please email Senior Vice President of Federal Advocacy Stephanie Cuevas.
