House Speaker Mike Johnson poured cold water on President Donald Trump’s proposal to cap credit card interest rates, telling reporters Tuesday that Trump “probably had not thought through” the negative consequences for consumers.
Trump, as part of his affordability push, floated a temporary 10% cap on credit card rates Friday, adding that he wants a freeze to begin for one year starting on Jan. 20. The proposal would likely require Congress to act, but Johnson signaled his chamber would not be taking up legislation anytime soon. (RELATED: Trump Wants One-Year Cap On Credit Card Interest Rates)
WATCH:
You’ve got to be very careful if you go forward in that, in the inner zeal to bring down costs, you don’t want to have negative secondary effects of that,” Johnson told reporters, in response to a question asked by the Daily Caller News Foundation. He added that Trump is an ‘ideas guy” who is focused on bringing down the cost of living, but acknowledged that some of his proposals could have “unintended consequences.”
“What some of the experts have said, well but the problem is if you do that, then the credit card companies … would stop lending money and maybe they cap what people are able to borrow at a very low amount,” Johnson added.
Johnson’s comments are a notable departure for the speaker, who is typically in lockstep with Trump’s policy agenda.
Conservatives and the banking industry, however, have long opposed capping credit card interest rates, which they argue would limit low-income Americans’ access to credit and force them to turn to riskier options, such as payday lenders.
“Evidence shows that a 10% interest rate cap would reduce credit availability and be devastating for millions of American families and small business owners who rely on and value their credit cards, the very consumers this proposal intends to help,” the American Bankers Association (ABA) and other industry groups said in a statement Friday. “If enacted, this cap would only drive consumers toward less regulated, more costly alternatives.”
The White House did not immediately respond to a request for comment from the DCNF.
Left-wing Independent Vermont Sen. Bernie Sanders and Democratic Massachusetts Sen. Elizabeth Warren — in addition to populist Republican Sen. Josh Hawley — have conversely championed capping credit card rates.
“President Trump is right: working Americans are drowning in record credit card debt while the biggest credit card issuers get richer and richer by hiking their interest rates to the moon,” Hawley said in a statement Monday. “It’s not just wrong, it’s exploitative. And it needs to end.”
Trump argued that Americans are being “ripped off” by credit card companies who are charging interest rates of “20 to 30%, and even more” in a Truth Social post announcing the proposal Friday. He noted the freeze would coincide with the one-year anniversary of the start of his second term.
He initially proposed a 10% cap during the 2024 presidential campaign.
The average credit card interest rate in the United States is 23.97%, according to LendingTree.
Trump has also recently proposed banning large investors from purchasing single-family homes to address housing affordability concerns. Some conservatives have panned the proposal for not tackling the root problems of housing affordability.
Senate Majority Leader John Thune also signaled opposition to capping credit card rates Tuesday.
“I think that would probably deprive an awful lot of people of access to credit around the country,” Thune told reporters. “Credit cards would probably become debit cards. So, I mean, that’s not something I’m out there advocating for, I’ll put it that way.”
Andi Shae Napier contributed to this report.
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