President Donald Trump on Wednesday called on U.S. lawmakers to pass legislation that would limit credit card interest rates to a maximum of 10% for one year. This announcement followed his earlier social media request for banks to voluntarily reduce their rates.
Speaking from the World Economic Forum in Davos, Switzerland, Trump stated, "I'm asking Congress to cap credit card interest rates at 10% for one year, and this will help millions of Americans save for a home." He criticized the current rates, saying, "They charge Americans interest rates of 28%, 30%, 31%, 32%. Whatever happened to usury?"
In response, shares of banks saw an increase, with the KBW Bank Index rising 2.2% in morning trading and Capital One, largely dependent on credit card revenue, advancing by 1.9%.
The legislative approach may be seen as the least threatening to the banking industry among various options considered by the Trump administration to address credit card rates. A previous proposal by Senators Josh Hawley (R-Mo.) and Bernie Sanders (I-Vt.) suggested a similar cap for five years but has made little progress in Congress.
Financial analysts, including Sanjay Sakhrani of KBW, are skeptical about the measure securing enough bipartisan support to become law. Even within Trump's Republican Party, key figures like House Speaker Mike Johnson have shown reservations regarding price controls on credit cards.
"If this is the path, the odds of implementation are low," commented Sakhrani. "There is a lot of Republican leadership that opposes the idea," and he noted that industries such as airlines and retailers could be adversely affected by such policies.
It remains uncertain if Trump's influence over GOP lawmakers will enhance prospects for the plan's passage.