Sponsors (2)
The bill would make credit card borrowing cheaper and give consumers stronger remedies for over‑charging, but at the cost of likely tighter underwriting, higher non‑interest fees, reduced lender competition, and regulatory uncertainty that could limit access to credit for higher‑risk borrowers.
Low‑ and middle‑income consumers would pay less interest on credit card balances because APRs would be capped (10-point spread inclusive of finance charges), lowering the cost of carrying revolving debt.
Heavily indebted households (especially low‑income borrowers) would face lower monthly interest charges, improving their ability to repay, reducing total interest paid, and lowering financial stress and bankruptcy risk.
Consumers charged above the cap could recover all interest, finance charges, and fees paid within two years, giving harmed borrowers a clear remedy under TILA.
Applicants with weaker credit (including many low‑income borrowers and some small businesses) could face reduced access to credit as lenders tighten underwriting or pull back from higher‑risk customers.
Card issuers are likely to shift lost interest revenue into higher upfront or ancillary fees (annual, late, or other fees), raising non‑interest costs for many consumers.
Lower returns on unsecured lending could push some lenders out of the market or reduce competition, shrinking product variety and innovation in credit products.
Based on analysis of 2 sections of legislative text.
Imposes a federal cap limiting credit-card APRs to a 10 percentage point spread including all finance charges, bans fee-evasion, adds remedies, and sunsets in 2031.
Caps credit-card annual percentage rates (APRs) so the spread cannot exceed 10 percentage points and treats all finance charges as part of that cap. It bars using non-finance fees to get around the cap, limits such fees to at most the finance charges assessed, creates a private right to recover interest and fees when the cap is violated, applies statutory enforcement remedies, preserves stronger state protections, and sunsets the federal additions on January 1, 2031.
Introduced March 6, 2025 by Alexandria Ocasio-Cortez · Last progress March 6, 2025