WASHINGTON– Sources on Capitol Hill have indicated that during today’s markup in the House Financial Services Committee an amendment will be offered to implement a 10% cap on credit card APRs.
There has been significant concern and huge pushback by financial institutions over the proposal ever since President Trump said in a post on Truth Social that he would “no longer let the American Public be ‘ripped off’ by Credit Card Companies that are charging interest rates of 20 to 30% and even more.” The president said he wanted a 10% APR cap in place by Jan. 20, a deadline that has since passed and which a White House spokesperson said was an “expectation.”
The CU Daily has had significant related reporting around the cap proposal.
Both America’s Credit Unions and the Defense Credit Union Council have issued strong objections to the proposed 10% lid on APRs, including after Trump repeated the demand during the World Economic Forum in Davos, Switzerland.
‘Moving So Fast’
Now, it appears language related to the cap could be added as an amendment in the House committee, sources say.
“Everything is moving so fast on all of these credit card issues, it should come as no surprise that the President’s comments in Davos reverberated on Capitol Hill almost instantly,” said John McKechnie, who advocates on Capitol Hill on behalf of credit unions. “Both the 10% and (Credit Card Competition Act) put more pressure on Republicans politically–they have generally been opposed to price controls like those being floated by the President, and the vote on the rate cap amendment will be the first indication of how congressional Republicans handle what is undoubtedly be a tricky situation.”
Two Bills for Markup
The two bills being marked up today include:
- The Financial Reporting Threshold Modernization Act (H.R. 1799), which would update the Currency Transaction Report (CTR) threshold to $30,000 (up from $10,000), increase the SAR threshold to $10,000 (up from $5,000), and ensure the CTR threshold is periodically adjusted for inflation. Rep Barry Loudermilk, R-Ga., introduced the bill;
- The Community Bank Regulatory Tailoring Act (H.R. 7056), which would update asset thresholds in the Federal Credit Union Act and other areas of financial law, including raising the threshold for small credit unions to $34 million (up from $10 million) and raising the asset threshold for the large credit union audit requirement to $2 billion (up from $500 million), and others under the Dodd-Frank Act, the Home Mortgage Disclosure Act and the Federal Home Loan Bank Act. Rep. Andy Barr, R-Ky., introduced the bill.
America’s CUs Sends Letter
America’s Credit Unions sent a letter that urged the committee to also reject any extraneous amendments that may seek to establish a new national rate cap on credit cards or bring government interference to the credit card interchange system.
“These efforts to impose price controls would do nothing to help consumers or increase affordability,” reads the letter. “These amendments would ultimately harm access to credit for many consumers and weaken data security of card networks, while having negative impacts on community financial institutions, such as credit unions, and the consumers they serve.”
DCUC Sends Letter
Ahead of the markup, the Defense Credit Union Council the Defense Credit Union Council, (DCUC), sent a letter expressing concern that no credit union-specific legislation has been included on the committee’s markup agenda, despite what it described as “repeated advocacy highlighting long-standing priorities critical to financial access and readiness for communities nationwide.”
In the letter, DCUC urged committee leadership to prioritize measures such as modernizing credit union field-of-membership rules, exempting veteran-owned small business loans from the member business lending cap, and restoring permanent access to an enhanced NCUA Central Liquidity Facility.
Additional Concerns
While raising concerns about the omission of credit union priorities, DCUC noted it also expressed support for several bills scheduled for consideration, including:
- Legislation promoting responsible use of artificial intelligence in financial services
- Modernizing Bank Secrecy Act reporting thresholds
- Expanding access to capital for small businesses
- Strengthening enforcement against cyber-enabled financial crime
- Tailoring regulation for community financial institutions
- Improving secondary market liquidity, and reauthorizing the Terrorism Risk Insurance Program (TRIA).
‘Critical Role’
“Defense credit unions are a critical part of our nation’s financial system and play a unique role in supporting servicemembers and veterans,” Jason Stverak, DCUC’s chief advocacy officer, said in a statement. “We appreciate the Committee’s work on these bills, but urge Congress to also address overdue credit union priorities that directly impact financial inclusion, resilience, and readiness for those who serve our country.
Today’s markup begins at 10 a.m.
