Will Trump Chicken Out on a Nationwide 10% Credit Card Rate Cap?

January 20, 2026

by Jonathan D. Joseph* and Michael Kadish**

On January 9, 2026, likely motivated by declining popularity amongst voters, President Trump posted on Truth Social:

"Effective January 20, 2026, I, as President of the United States, am calling for a one year cap on Credit Card Interest Rates of 10%."

How he would accomplish this has not been shared publicly, and many financial industry insiders seem comfortable believing that no action will be forthcoming.  For example, Adam Rust, director of financial services for the Consumer Federation of America, was quoted by U.S. News & World Report on January 12:

"The president doesn't have the authority to force a rate cap, and Dodd-Frank did not give the Consumer Financial Protection Bureau permission to set interest rate caps. There's no shortcut here. Congress would have to act first, regulators would then have to write the rules and any final rule would likely be tied up in court."

The January 9th post was not framed as an executive order, and Trump seems to understand he cannot impose a rate cap by demanding one.  Press Secretary Karoline Leavitt said on January 16 that “this is an expectation and frankly a demand …” but even Ms. Leavitt admitted she didn’t know a specific consequence if rates are not lowered.

Could the industry be lulled into a false sense of security that it can convince the President it would be politically and economically unwise for him to impose a cap on credit card rates due to the potentially enormous adverse impact on consumers and the credit card industry?  A study released on January 12, 2026, by the Electronic Payments Coalition reported that a 10% APR cap on open credit card accounts would result in 175 – 190 million Americans effectively losing access to credit including the closure of nearly every account associated with a credit score below 740.  

In early 2025, Republican Senator Josh Hawley joined Democratic Senator Bernie Sanders to introduce S.381, a bill that would amend the Truth in Lending Act to cap credit card interest rates at 10%.  Since then, Senators Jeff Merkley (D-OR) and Kirsten Gillibrand (D-NY) also co-sponsored.  The identical bill was introduced in the House as H.R.1944 in March 2025 by Democratic Rep. Ocasio-Cortez and Republican Rep. Luna.  

Americans held over $1.2 trillion in credit card debt as of the third quarter of 2025. A reduction in rates, even if to a compromise rate between the proposed 10% and the current average rate of 19.7% (as recently reported by Bankrate.com), would significantly reduce revenues to card issuers and could severely crimp the purchasing power of millions of Americans.  

Shares of large banks, including Citigroup, JPMorgan Chase, Wells Fargo and Bank of America were down between 1% and 3% on January 12, 2026 and those of Capital One, whose loan book is mostly credit cards, sank nearly 7%. 

Do these stock price declines indicate the market perceives a real risk to bank profits?  Maybe. 

The Dow Jones U.S. Banks Index dropped from 854.06 at the close of Friday, January 8, to 808.05 on January 14, before rebounding to 820.14 on January 16.  Possibly the market believes that the President will “chicken out.”  On the other hand, JPMorgan Chase’s stock price closed lower on January 16 than it did on January 13.  

In 2010, prior to the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) being adopted and after the government’s massive 2008-2009 rescue of the US banking system via the Troubled Asset Relief Program (TARP), large swaths of the banking industry felt they had weathered that storm, so the industry largely disregarded talk that major consumer protection legislation might advance.  Consequently, the industry didn’t proactively try to head it off — and was surprised when Dodd-Frank was enacted with lightning speed, on a bipartisan basis, with significant consumer protection provisions including creation of the now beleaguered Consumer Financial Protection Bureau (CFPB).  Democrats, who were frustrated that banks were rescued while consumers bore the brunt, and Republicans some of whom were offended by government intrusion into the markets, found common ground. Could something similar occur in 2026 with D’s and R’s sponsoring rate cap legislation prompted by a President bent on imposing his will without legislation?  

Even if rate cap legislative action is avoided, or stalls, there could be immediate consequences from Trump’s announcement. He also demanded the cap be effective by January 20, 2026.  The President has found ways to impose his demands on private enterprises not involving legislation or executive orders. For example, when Trump demanded that pharmaceutical companies cut drug prices, he received some pledges from the industry.  Some companies have responded to his demand that chip makers and tech companies move production to the United Staters by increasing manufacturing capacity here.  

Similarly, he has influenced media companies’ decisions regarding programming and content by stalling, or threatening to stall, mergers and acquisitions in the antitrust review process. The risk he could do the same to influence credit card rates of banking organizations seeking regulatory approval of mergers or acquisitions is real.  Even routine applications by a national bank to establish or relocate a branch could be affected since the OCC’s regulations (12 C.F.R. § 5.30(e)) provide that “in determining whether to approve an application to establish or relocate a branch, the OCC is guided by the following principles: . . . Promoting fair treatment of customers . . .”   

Dodd-Frank specifically denied the CFPB authority to establish a usury limit applicable to consumer loans (Section 1027(o)) unless “explicitly authorized by law.”  Thus, the banking agencies do not have the authority to impose an interest rate cap on credit cards without federal legislation.  This doesn’t mean the industry should ignore the possibility that regulatory agencies will take the President’s demands into consideration when processing applications for acquisitions or expansion or that the agencies including the CFPB could attempt to bully them into lowering credit card rates.  

Perhaps the real question is whether Trump will “chicken out” on his rate cap demand based upon insiders in the Trump administration and savvy banking lobbyists helping him understand that millions of consumers (voters) will be hurt by his effort to impose a nationwide interest rate cap on credit cards.

*Jonathan D. Joseph is the co-founder of Feldman Joseph Law in Santa Monica, CA.

**Michael Kadish, an experienced bank regulatory attorney, is a friend of Feldman Joseph Law, however, he is not affiliated. 

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