Visa and Mastercard by Nick Youngson is licensed under CC BY-SA 3.0

Senators Elizabeth Warren (D-Mass.) and Bernie Sanders (I-Vt.) are pushing two major government interventions that threaten access to credit for American households: 

  • Interest rate caps — “price controls” on the cost of credit that shrink access to loans, especially for working families and higher-risk borrowers. 
  • The Credit Card Competition Act (CCCA) — a federal mandate to steer credit card routing and manipulate interchange fees. 

These proposals will worsen affordability for working Americans. 

Conservative leaders are fighting back against credit card price controls

House Speaker Mike Johnson: “The problem is, if you do that, then the credit card companies, the negative secondary effect is that they would just stop lending money, and maybe they cap what people are able to borrow at a very low amount.”

Senate Leader John Thune: “That would probably deprive an awful lot of people of access to credit around the country. Credit cards would probably become debit cards.”

Price controls distort markets, reduce consumer choice, and can raise costs elsewhere while threatening credit access, privacy, and rewards. 

190 million Americans could lose credit card access under a 10% rate cap according to a study conducted by the Electronic Payments Coalition.  

“82–88% of Americans could potentially be cut off from consumer credit.” 

Rate caps disproportionately hurt low income households and individuals, reserving credit access solely for large corporations and wealthy borrowers

Interest rate caps are a price control tool that will only serve to limit the availability of credit to consumers. Interest rates signify the borrower’s risk of default or failure to pay back their debt, explaining why large corporations and financial institutions receive more favorable rates than small borrowers. By lowering rates to 10%, far fewer individuals and businesses will be eligible for credit as companies will be less willing to run the risk of lending to less creditworthy borrowers.  

Previous price controls on debit cards did nothing to pass savings to consumers 

Experience with prior price controls on debit cards resulted in no savings for consumers. After the Durbin Amendment’s debit interchange price controls, data showed more retailers raised prices than lowered them, according to a study conducted by the Federal Reserve Bank of Richmond. 

Interchange fee caps raised the cost of banking for ordinary Americans 

According to a report by the Government Accountability Office (GAO), 65% of noninterest bearing checking accounts would have no monthly fee had the original Durbin Amendment not been enacted. In many cases, minimum balance requirements on checking accounts also rose.

States have seen the damage and rejected price controls on credit 

Illinois’ 2021 36% “all-in” interest rate cap didn’t create “affordable credit” for the families it was supposed to help—it made many of them worse off.

One survey found that 49% of respondents with personal incomes below $50,000 said their overall financial well-being declined after the cap took effect.  

When lawmakers push rate caps, they often reduce access to short-term credit and emergency options. Alaska’s governor vetoed a rate-cap bill for loans under $25,000, citing concerns about access to short-term and emergency credit.

The CCCA will erode valued rewards programs on credit cards that cardholders enjoy

According to the International Center for Law & Economics, “86% of credit cardholders have active rewards cards, including 77% of cardholders with a household income of less than $50,000.” The disappearance of rewards would likely harm minority communities and small businesses. 

The CCCA would mandate routing outcomes and pressure interchange fees downward through federal intervention.

That means:

  • Less consumer choice (government chooses “winners” in payment routing)
  • Less innovation and competition (rules replace market discipline)
  • Higher costs shifted elsewhere (fees don’t vanish; they reappear)
  • Risk to rewards and benefits that consumers use every day

Tell Congress to oppose the Credit Card Competition Act and oppose interest rate caps and other price controls that reduce access to credit.