Sponsors (4)
The bill would significantly lower interest costs and provide remedies for overcharging for many cardholders, but it risks reduced credit access and higher non-interest fees as lenders adjust pricing and creates uncertainty with a 2031 sunset.
Low- and middle-income consumers with credit card debt would face a 10% APR cap, lowering their monthly payments and total interest paid.
Cardholders who were charged rates above the cap (within two years of the last usurious collection) could recover all interest, finance charges, and fees paid.
Low-income cardholders would gain stronger protection against predatory pricing because creditors who knowingly exceed the cap lose all interest on the obligation.
Higher-risk consumers (often low-income individuals and some middle-class families) may find it harder to obtain credit as issuers tighten underwriting or restrict card access.
Low- and middle-income cardholders may face higher non-interest fees (late fees, annual fees) or see costs shifted to other products as issuers offset lost interest revenue.
Financial institutions and consumers could incur higher costs from increased litigation and compliance risk, which lenders may pass on to customers via fees or reduced benefits.
Based on analysis of 2 sections of legislative text.
Caps credit‑card APRs at 10% (including finance charges), bans fee circumvention, allows recovery of excess charges, and sunsets Jan 1, 2031.
Official title: Amend the Truth in Lending Act to cap credit card interest rates at 10 percent.
Introduced February 4, 2025 by Bernard Sanders · Last progress February 4, 2025
Creates a federal cap that limits the annual percentage rate (APR) on credit card accounts to 10 percentage points (including all finance charges). It bars use of extra fees to get around the cap, allows borrowers to recover interest and fees charged above the cap for two years after the last usurious collection, and makes knowing violations subject to forfeiture of all interest; the cap and related enforcement provisions expire on January 1, 2031. The measure preserves any state law that provides stronger consumer protection and adds conforming language to existing Truth in Lending Act remedies.