Affordability Requires Access, Not Arbitrary Caps

In partnership with

Scott Simpson is President & CEO of America’s Credit Unions

Affordability is a real concern for American families. It’s the reason that credit unions were created to begin with. So we can see how rising prices, higher interest rates, and economic uncertainty are putting pressure on household budgets across the country. President Trump is right to focus on ways to ease that stress and protect consumers. But when it comes to credit, good intentions alone are not enough. Policymakers must be careful that their efforts to lower costs do not end up severing access to affordably priced loans altogether.  

Arbitrary Exclusion

Proposals to impose a rigid 10% cap on credit card interest rates risk excluding millions of consumers from access to credit. Price controls do not eliminate the cost of credit. They simply shift it. Lending must account for risk and requires the payment of administrative costs and expenses related to adhering to government regulations.    

Those costs don’t go away just because policymakers arbitrarily limit prices, and lenders cannot absorb those costs indefinitely. Eventually, and likely very quickly, they will have no choice but to reduce the availability of credit, particularly for lower-income and credit-constrained consumers who rely most on access to mainstream credit.   

Credit Where Credit is Due

For millions of Americans, credit cards serve as a realistic option to help them manage unexpected expenses, cover gaps between paychecks, and avoid far-more-dangerous alternatives. Roughly 47 million Americans are considered “subprime” borrowers, meaning they are high credit risks. Under a blanket 10% rate cap, many of these consumers would be shut out of the credit card market altogether, even though they currently benefit from the responsible use of credit cards. A recent academic study of large card issuers shows that loss rates for the lowest credit-score borrowers routinely exceed 10%. Once you layer in funding costs of roughly 2% for credit unions, a 10% interest rate cap makes lending to subprime borrowers unprofitable, cutting off access to credit for the very consumers these policies claim to help. That loss of access would ripple through the economy, crippling consumer spending and damaging an economy that is facing significant headwinds.  

Affordability is not a mere talking point for credit unions. The concept is central to their operations. Credit unions were founded as consumer protectors. They were created to expand access to fair, affordable credit for people often left behind by other financial institutions. As not-for-profit, member-owned financial cooperatives, credit unions reinvest their earnings into their membership such as offering lower rates, better fees, and their communities rather than paying shareholders. Many credit unions already operate with interest rates well below market average — demonstrating that affordability can be achieved without rigid, one-size-fits-all federal mandates. 

That model delivers real results. Credit union members consistently benefit from some of the lowest rates in the marketplace, often roughly half the average annual percentage rate charged by other issuers, along with fewer fees and responsible underwriting tailored to members’ needs. Importantly, this system already protects consumers who have access to credit while responsibly expanding access to those who need it most.  

The Treatment Shouldn’t Kill the Patient

One-size-fits-all price controls threaten to undermine that proven model. History shows that mandates, however well-intentioned, can overshoot their targets and produce unintended consequences that harm the very consumers they are meant to protect. Legislation proposing a 10% “all-in” credit card rate cap that covers both interest and fees is fundamentally different than the existing framework used by federal credit unions. That system balances affordability with safety and soundness. Treating these models as interchangeable ignores decades of evidence about what works well for consumers.   

Credit unions support local economies, small businesses, military families, and consumers generally by providing trusted and accessible financial services. They are also committed to steering consumers away from predatory lending practices by offering fair, regulated alternatives that keep people out of debt traps. Policymakers should build on this model, not blunt it with tools that reduce choice and access for the people they aim to help.   

Targeted, data-driven solutions move in the right direction. That means focusing on competition, transparency, financial education, and policies that address the root causes of financial stress for families that live paycheck to paycheck. It also means weighing consequences carefully before disrupting credit markets that millions of Americans depend on.   

We share President Trump’s goal of making people’s lives more affordable. But arbitrarily capping credit card rates at 10% would make credit less attainable, not more affordable, for millions of working Americans. Credit unions are ready to work with policymakers on solutions that protect consumers, preserve access, and strengthen the financial well-being of the people we serve.

The opinions shared in this article are the author’s own and do not reflect the views of any organization they are affiliated with.

Open Banker curates and shares policy perspectives in the evolving landscape of financial services for free.

If an idea matters, you’ll find it here. If you find an idea here, it matters. 

Interested in contributing to Open Banker? Send us an email at [email protected].

Dictate prompts and tag files automatically

Stop typing reproductions and start vibing code. Wispr Flow captures your spoken debugging flow and turns it into structured bug reports, acceptance tests, and PR descriptions. Say a file name or variable out loud and Flow preserves it exactly, tags the correct file, and keeps inline code readable. Use voice to create Cursor and Warp prompts, call out a variable like user_id, and get copy you can paste straight into an issue or PR. The result is faster triage and fewer context gaps between engineers and QA. Learn how developers use voice-first workflows in our Vibe Coding article at wisprflow.ai. Try Wispr Flow for engineers.

Start flowing free