Leading Financial Groups Voice Opposition To Legislation Seeking To Impose Government Price Controls On Credit Cards

In a new letter sent today, eight leading financial groups representing virtually all banks and credit unions voiced their opposition to the Capping Credit Card Interest Rates Act, a misguided proposal from Senator Josh Hawley (R-Mo.) that would impose government price controls on credit cards and effectively harm the very people the legislation seeks to protect.   

As outlined in the letter, Sen. Hawley’s proposal for an “all-in” annual percentage rate (APR) cap for credit cards at 18 percent would severely restrict the availability of this type of credit for millions of consumers across this nation: 

“Including annual fees and other fees in the calculation will cause credit cards to exceed the cap, resulting in the elimination or reduction of valuable credit card features like cash back and other rewards. This cap will also impede innovative credit cards with non-credit features designed to attract underserved groups because even a nominal annual fee could result in an all-in rate that exceeds the cap.” 

While proponents of the legislation believe a cap on credit card fees and interest would benefit consumers, the reality is that many cardholders, including Senator Hawley’s own constituents, would ultimately be forced to meet their short-term financing needs from payday lenders and other venues outside the well-regulated banking system: 

“One in nine Missourians already uses payday loans, almost double the national average, and payday lenders in Missouri charge annual interest rates of more than 300 percent. This bill would eliminate access to credit cards for millions of consumers and direct them to sources of credit which are far more costly and less regulated.” 

Credit cards are among the most well-regulated products available to consumers today. Thanks to ongoing bank-led innovation, they’re also cheaper and more accessible than any time in history. As the groups state, the harmful effects of this proposal are only compounded by the CFPB's imminent rule to arbitrarily reduce credit card late fees to $8: 

“Credit card customers are already facing higher prices and reduced access to credit due to the CFPB’s misguided interventions in the market: the CFPB estimates that its proposal to reduce the safe harbor for credit card late fees will cause APRs to increase by about 2 percent. This would push millions more credit card accounts over the legislation’s 18 percent cap, eliminating a critical source of credit for everyday consumers.”

As representatives of not-for-profit credit unions, community banks, and both large and small financial institutions that issue credit cards, the groups concluded by reiterating a shared commitment reducing consumer debt while simultaneously protecting access: 

“This goal can be achieved without creating barriers for accessing safe and affordable credit products by pushing consumers with troubled credit histories and those on the financial fringe outside of highly regulated financial products to far more costly and less regulated lenders.” 

To read the full letter, click HERE.


About the Trade Associations

About CBA

The Consumer Bankers Association represents America’s leading retail banks. We promote policies to create a stronger industry and economy. Established in 1919, CBA’s corporate member institutions account for 1.7 million jobs in America, extend roughly $4 trillion in consumer loans and provide $275 billion in small business loans annually. Follow us on Twitter @consumerbankers.  

About BPI

The Bank Policy Institute (BPI) is a nonpartisan public policy, research and advocacy group, representing the nation’s leading banks and their customers. Our members include universal banks, regional banks and the major foreign banks doing business in the United States. Collectively, they employ almost 2 million Americans, make nearly half of the nation’s small business loans, and are an engine for financial innovation and economic growth.


The National Association of Federally-Insured Credit Unions is the only national trade association focusing exclusively on federal issues affecting the nation’s federally-insured credit unions. NAFCU membership is direct and provides credit unions with the best in federal advocacy, education and compliance assistance. For more information on NAFCU, go to www.nafcu.com or @NAFCU on Twitter. 

About CUNA

Credit Union National Association (CUNA) advocates on behalf of America’s credit unions, which are owned by more than 135 million consumer members. CUNA, along with its network of affiliated state credit union leagues, delivers unwavering advocacy, continuous professional growth and operational confidence to protect the best interests of all credit unions. For more information about CUNA, visit cuna.org. To find your nearest credit union, visit YourMoneyFurther.com.

About AFSA

Formed in 1916, the American Financial Services Association (AFSA) is the primary trade association for the consumer credit industry, protecting access to credit and consumer choice. AFSA’s more than 450 corporate members provide consumers with many kinds of credit, including traditional installment loans, direct and indirect vehicle financing, mortgages, payment cards and non-vehicle retail sales finance.

About ABA

The American Bankers Association is the voice of the nation’s $23.5 trillion banking industry, which is composed of small, regional and large banks that together employ more than 2.1 million people, safeguard $18.6 trillion in deposits and extend $12.3 trillion in loans.

About ICBA

The Independent Community Bankers of America® creates and promotes an environment where community banks flourish. ICBA is dedicated exclusively to representing the interests of the community banking industry and its membership through effective advocacy, best-in-class education, and high-quality products and services. With 45,000 locations nationwide, community banks employ nearly 700,000 Americans and are the only physical banking presence in one in three U.S. counties. Holding $5.9 trillion in assets, $4.8 trillion in deposits, and $3.9 trillion in loans to consumers, small businesses and the agricultural community, community banks channel local deposits into the Main Streets and neighborhoods they serve, spurring job creation, fostering innovation and fueling their customers' dreams in communities throughout America. For more information, visit ICBA's website at www.icba.org.

About AMBA

The Association of Military Banks (AMBA) is the only trade association representing banking institutions specializing in providing banking services for military personnel and their families around the world. AMBA has a long history of partnering with the Department of Defense for the benefit of military members and their dependents. AMBA’s membership includes large and small national and state-chartered banks, most operating on military installations and all insured by the Federal Deposit Insurance Corporation (FDIC). AMBA represents the interests of banking institutions serving the military.