This week, President Trump announced support for a 10% cap on credit card interest rates as a way to address affordability concerns. While the proposal is still developing and would require congressional action, it has already sparked serious concern across the credit union industry.
At first glance, a rate cap may sound helpful. But in practice, arbitrary price controls can reduce access to credit, especially for borrowers who rely on credit cards for emergencies, everyday purchases, or to build credit.
Interest rates reflect the risk lenders take on. If rates are capped too low, many lenders, including credit unions, may be forced to limit or stop offering credit to higher-risk members. That can push consumers toward more expensive and less regulated options, like payday loans or buy-now-pay-later products.
Credit unions already offer some of the lowest rates and most consumer-friendly credit card programs in the market. A one-size-fits-all federal cap could undermine those efforts and make it harder for members to access safe, affordable credit.
Luminate is actively tracking this developing issue and working with national partners to protect credit union members and access to credit.
Credit unions are encouraged to:
- Stay engaged with Luminate for updates and advocacy guidance
- Be prepared to contact your U.S. Senators and Representatives
- Urge lawmakers not to support arbitrary interest rate caps that could restrict credit and harm consumers
- Use Luminate’s resources to help boards, staff, and members understand what’s at stake
This issue is evolving quickly, and Louisiana credit unions’ voices will be essential in shaping what happens next.