New Legislation Introduced by Sanders and Hawley Seeks to Limit Credit Card Interest Rates

Senators Bernie Sanders and Josh Hawley have introduced a bill that would cap credit card interest rates at 10%, in response to the average rate being over 20%. Sanders believes that high interest rates charged by financial institutions constitute extortion and loan sharking. The proposed bill is aimed at providing relief to working people and would be in effect for five years. However, the bill is expected to face opposition from bank and credit card industry lobbyists who argue that rate caps are unworkable and harm consumers by limiting credit options. The American Financial Services Association, a trade association for the consumer credit industry, has expressed concern about the impact of rate caps on consumer choice and flexibility, instead advocating for pro-consumer policies that provide more options for managing finances. Despite efforts to regulate credit card interest rates, credit card debt among Americans continues to rise, reaching $1.17 trillion in the third quarter of 2024.