Today, Sen. Josh Hawley partnered with Sen. Bernie Sanders, I-Vt., to sponsor legislation that would cap credit card interest rates at 10%. If their bill passes and is signed into law, the cap would begin immediately and be effective for five years.
MBA adamantly opposes this measure. It inflicts harm on consumers across Missouri and will reduce access to credit for underserved populations.
Hawley and Sanders claim that capping the interest rates “is a simple way to provide meaningful relief to working people.” Their legislation, however, creates more burden and stress for consumers.
“Hawley and Sanders are putting the individuals they want to help directly in harm’s way,” said MBA President and CEO Jackson Hataway. “This bill will immediately reduce credit access for consumers who need it the most.”
Capping rates means fewer choices for consumers. Many financial institutions that issue credit cards may cease operations or be forced to offer significantly lower limits on cards. This pushes consumers to resort to alternative credit providers — which are not regulated — that charge exorbitant fees.
“If the senators truly want to help working families, they would focus their attention on those unregulated entities that reap profits from excessive fees,” Hataway said.
This isn’t the first time that Hawley has sponsored legislation that inflicts harm on the working class. In fall 2023, he introduced his own measure to cap credit card annual percentage rates. Since then, MBA and its members have repeatedly voiced our concerns to Hawley about the detrimental effects that will result from capping these rates.
“Missouri banks stand fast in their commitment to consumers and to their communities,” Hataway said. “We know our banks work hard to support their customers and drive financial well-being. Government price controls never work as intended and will only add to the pressures banks face to remain economic engines in their communities.”
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