President Donald Trump could save American families hundreds of dollars on credit cards, but so far he has been all talk and no action.
At the State of the Union, President Trump will try to tell a cheerful story about his failed economic agenda. During his campaign, he promised to cut costs “on day one.” Now more than 400 days into his second term, his policies are forcing Americans to pay more for everything from groceries to housing to electricity. Last Friday, the Supreme Court reprimanded him for illegally taking money from working families. And polls show that the American people believe the president is not doing enough to reduce costs.
One way Trump could quickly reduce costs is by making good on his campaign promise and putting a 10% cap on credit card interest rates. This could save the average American with credit card debt about $900 per year. Collectively, families could save about $100 billion, giving them some breathing room and strengthening the economy overall.
TRUMP CALLS FOR A 10% CAPACITY ON CREDIT CARD RATES FOR 1 YEAR
On January 9, the president seemed ready to take action. He announced that credit card companies will no longer defraud the American people – and then politely asked the largest banks to implement a one-year cap on credit card interest rates of 10% by January 20. At the time, I said it was foolish to ask credit card companies to play nice, and if the president meant it, he would work to pass a bill through Congress that would lower rates.
Three days later, President Trump himself called me. I had just given a speech noting that he is driving up costs for families and sowing terror and chaos in our communities. I reiterated my position: If the president really wanted to cap credit card interest rates, he would use his influence and push a bill through Congress. During our phone conversation I conveyed the same message.
While the president dawdles, the big banks are coming out of the woodwork to warn of an “economic disaster” if we cap credit card interest rates. Give me a break.
That was six weeks ago. President Trump’s January 20 deadline has come and gone, and no one is surprised that the big banks haven’t voluntarily lowered credit card rates to help American families. Instead, Trump and his budget chief, Russ Vought, have gone in the opposite direction, trying to sideline the Consumer Financial Protection Bureau, which could be used to drive down credit card costs. While Trump claims he wants an interest rate cap on credit cards, his own regulators are helping the very same Wall Street banks that rip off Americans and keep states from protecting their citizens from skyrocketing loans.
SEN BERNIE SANDERS: WE SHOULD RESTRICT CREDIT CARD INTERESTS TO 10%
While the president drags his feet, the big banks are coming out of the woodwork to warn of an “economic disaster” if we cap credit card interest rates. Give me a break. These are the most profitable financial institutions in the history of the world. There is no reason for them to demand interest rates of 25% or 30% when smaller banks and credit unions offer much lower credit card interest rates and still make solid profits.
The big banks typically achieve a return of 1.5% on their loans, but for credit cards they achieve as much as 6.8%. Credit cards also provide new customers for other services. These banks could lower credit card rates and still be extremely profitable.
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Credit card CEOs love those high rates because they help finance much of the salaries and bonuses for those at the top. Compensation for every major bank CEO was $40 million last year, including the CEO of JPMorgan Chase Jamie Dimon pocketing a tidy $770 million. Shareholders are happy too. Major banks will pay out a record $140 billion in dividends and share buybacks by 2025. Meanwhile, the American people have been charged more than $150 billion in credit card interest annually.
Americans want relief – and Democrats are ready for it. After the president called me, I repeatedly contacted his chief of staff, Susie Wiles, to exchange ideas about designing an emergency 10% rate cap that would prohibit banks from retaliating by closing accounts, reducing lines of credit, or devaluing rewards. I also explained how we can move to a permanent rate cap so that credit card companies can’t scam people again after a year.
But after six weeks, there is no deal to help the American people. We don’t need any more speeches. We need an agreement on legislation and a commitment from the president to actually fight for it.
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Let’s pass a bill to cap credit card interest rates. The Senate Banking Committee could hold hearings in March and get a bill to the president’s desk this spring.
No more delays. It’s time to provide relief to American families.
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