Sponsors (4)
The bill would substantially lower credit-card borrowing costs and strengthen consumer remedies and fee transparency in the near term, but may reduce credit access, prompt higher non-interest fees, increase litigation and compliance risks, and create fiscal and planning uncertainty due to a sunset provision.
Low-income-individuals, middle-class-families, and credit-card-users would pay lower interest and finance charges because APRs on credit cards would be capped at 10 percentage points inclusive of finance charges, reducing borrowing costs.
Low-income-individuals and middle-class-families would gain stronger consumer protections: the bill bans using non-finance fees to evade the cap and allows consumers to recover interest, finance charges, or fees paid if sued within 2 years.
State-governments and consumers in states with stronger laws would retain those protections because the bill preserves more-protective state laws.
Middle-class-families, low-income-individuals, small-business-owners, and financial-institutions could face reduced access to credit because banks, credit card issuers, and some small lenders may restrict lending or exit markets to offset lower interest income.
Low-income-individuals and middle-class-families could face higher non-interest fees or other prices because lenders may raise allowed fees to offset lost interest revenue.
Taxpayers could face higher fiscal risk if the federal government needs to step in to guarantee credit or support borrowers if lending contracts shrink.
Based on analysis of 2 sections of legislative text.
Imposes a 10% APR cap on credit-card credit, limits non-interest fees, creates a private right to recover unlawfully charged interest/fees, preserves stronger state laws, and sunsets Jan 1, 2031.
Caps credit-card annual percentage rates (APRs) at 10% and restricts related fees and practices to prevent lenders from evading that cap. It gives cardholders (or their representatives) a private right to recover interest, finance charges, and fees paid if a lender knowingly charges above the cap, and treats such violations as forfeiture of all interest on the obligation. The measure preserves state consumer protections that are stronger than the federal cap, makes a conforming technical change to existing Truth in Lending enforcement provisions, and automatically removes the new federal cap and conforming change on January 1, 2031 (sunset).
Introduced February 4, 2025 by Bernard Sanders · Last progress February 4, 2025