In moments of economic pressure, simple solutions can sound appealing—but history reminds us that simplicity does not equal effectiveness. A recent proposal calling for a temporary federal cap on credit card interest rates has reignited a long-standing policy debate with serious implications for consumers, small businesses, and access to credit nationwide.
In response, American Bankers Association President and CEO Rob Nichols issued the following message to member bank CEOs, outlining why interest rate caps—despite good intentions—have consistently harmed the very households they aim to protect. His letter details how the industry is responding, what history tells us, and why engagement from banks and state associations will be critical in the weeks ahead.
What follows is a clear-eyed look at the stakes, the facts, and the path forward.
| To ABA member bank CEOs: By now I expect you have heard about President Trump’s social media post calling for a one-year 10% interest rate cap on credit cards. I am reaching out to share how ABA is responding to this proposal and to make sure everyone in our industry understands the damage a rate cap could have on millions of working-class American families and small businesses if this idea is ever enacted. After the president posted his call for a rate cap starting on Jan. 20, we immediately joined with the other major banking trade associations in issuing a joint statement detailing how rate caps have historically harmed the very people they are intended to help by sharply reducing access to credit. Millions of Americans would lose their credit cards if this is enacted. We will continue to work closely with our fellow trade associations, member institutions and respected third-party voices to share the troubling track record interest rate caps have had in the U.S and around the world with the administration and members of Congress. We have successfully defeated these kinds of proposals in the past, once policymakers fully understand the long-term economic damage that comes from dramatically reducing access to credit. I want to emphasize that we certainly understand and appreciate the president’s interest in improving affordability for Americans, a goal we share, but this proposal is counterproductive to that goal. As we learn more details about the president’s planned executive order, we will undoubtedly need to turn to ABA members and our state association colleagues to help us engage with the administration and Congress, and to detail the implications for the customers and communities you serve. I know we can count on you. We are already fully engaged in a separate policy fight over stablecoin regulation, which will continue. I’m confident that with your help, common sense will prevail with this proposal and we can avoid a policy error that would have devastating consequences for consumers, small businesses and the broader economy. We will continue to update you on this effort through ABA Daily Newsbytes, but please feel free to reach out to me or the ABA team if you have any questions. Thank you as always for your membership and support. |
| Best, Rob Nichols President and CEO American Bankers Association A Certified Great Place to Work® Tel: 202-663-7512 | @BankersPrez |