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ICBA and other groups expressed opposition to House legislation that would establish a 10% annual percentage rate cap for credit cards.
Details: In a letter to Representatives Alexandria Ocasio-Cortez (D-N.Y.) and Anna Paulina Luna (R-Fla.), the groups said the 10 Percent Credit Card Interest Rate Cap Act (H.R. 1944) would severely restrict the availability of credit for everyday consumers and effectively harm the very people the proposed legislation seeks to protect.
Effect: The groups noted that:
Research clearly shows that government price setting, including APR caps, hurts consumers.
Credit cards are a primary vehicle for expanding financial inclusion.
Interest rate caps have disproportionate negative effects on high‐risk borrowers, the exact population they are intended to help.
More Advocacy: In a recent letter to Sens. Bernie Sanders (I-Vt.) and Josh Hawley (R-Mo.), ICBA and other groups said the Senate version of the act, S. 381, would eliminate access to credit cards for millions of consumers and drive them to sources of credit that are more costly and less regulated.