Americans carrying credit card balances could see their annual percentage rates cut by more than half under companion bills introduced this Congress by a bipartisan group of lawmakers. The proposals, filed in both the Senate and the House, would amend the Truth in Lending Act to impose a hard 10% ceiling on credit card APRs. Federal Reserve data show the average rate on credit card plans now sits at about 21.5%, meaning the gap between current rates and the proposed cap is roughly 11.5 percentage points.
Why a 10% APR ceiling is drawing bipartisan sponsors
The bills arrived with an unusual coalition behind them. Sen. Josh Hawley, a Missouri Republican, and Sen. Bernie Sanders, a Vermont independent, introduced S.381, titled the 10 Percent Credit Card Interest Rate Cap Act. On the House side, Rep. Alexandria Ocasio-Cortez, a New York Democrat, and Rep. Anna Paulina Luna, a Florida Republican, filed the companion measure, H.R.1944. Both texts propose the same basic framework: a flat 10% APR cap on consumer credit cards, enforced through civil penalties and effective upon enactment with no sunset clause.
The timing reflects pressure from two directions. The Federal Reserve’s G.19 statistical release shows average credit card rates hovering near 21.5%, a level that has persisted even as the central bank’s own policy rate has moved. At the same time, the Consumer Financial Protection Bureau’s 2025 report to Congress on the credit card market, covering data through end-2024, documents that delinquencies have risen while rates stayed elevated. That combination gives sponsors a straightforward political argument: cardholders are paying more and falling behind more often.
If a 10% ceiling became law, card issuers would lose the ability to price risk through interest rates above that threshold. A Congressional Research Service analysis of the proposals notes that the cap would constrain risk-based pricing, the practice of charging higher rates to borrowers with weaker credit profiles. The likely industry response would not be a mass exit from the market. Instead, issuers would probably shift toward secured-card products that require upfront deposits and fee-heavy account structures that generate revenue below the rate cap. Such changes would show up first in the CFPB’s annual fee-table data before registering in the Fed’s G.19 rate averages, because the G.19 tracks interest rates rather than fee income.
What S.381 and H.R.1944 actually say
The legislative text of the Senate bill amends the Truth in Lending Act to establish a maximum APR of 10% on any credit card account offered to a consumer. The cap applies to the “annual percentage rate” as disclosed under existing TILA rules, meaning issuers could not sidestep the limit simply by relabeling interest charges. The bill also directs federal banking regulators and the Consumer Financial Protection Bureau to issue implementing regulations and to treat violations as breaches of existing consumer credit protections.
The House companion, H.R.1944, mirrors this structure and uses substantially the same definitions and enforcement framework. Both measures rely on TILA’s existing civil liability provisions, which allow consumers to sue for statutory damages, and they authorize regulators to pursue administrative penalties. Neither bill includes a phase-in period or an expiration date, which means the cap would take effect immediately upon enactment and remain permanent unless Congress later amends or repeals it.
The official introduction of the House measure appears in the enrolled text published by the Government Publishing Office, which records the proposed 10% ceiling and its placement within TILA in the initial House draft. That version confirms that the cap would apply broadly to open-end consumer credit plans accessed by a credit card, without carve-outs for particular issuers or card types.
Potential effects on borrowers and lenders
Supporters argue that a 10% ceiling would deliver immediate relief to households revolving balances at today’s much higher rates. For a borrower carrying $5,000, a drop from roughly 21.5% to 10% could reduce annual interest charges by several hundred dollars, even before accounting for any behavioral changes in repayment. Advocates also frame the cap as a way to push lenders toward underwriting based on ability to repay, rather than relying on double-digit rates to compensate for defaults.
Critics, including many in the financial services industry, counter that such a low fixed ceiling would make it uneconomical to extend unsecured credit to higher-risk borrowers. If issuers cannot charge more than 10%, they may respond by tightening approval standards, lowering credit limits, or shifting customers to secured cards that require cash collateral. Some analysts warn that borrowers shut out of mainstream credit cards could turn to alternative products such as payday loans or pawn credit, which often carry even higher effective costs.
There is also debate over how issuers might reconfigure pricing. One likely adjustment would be greater reliance on annual fees, balance-transfer fees, and other charges that are not expressed as an APR but still increase the overall cost of borrowing. While TILA requires disclosure of these fees, a system that pushes revenue into non-interest charges could make it harder for consumers to compare offers using a single benchmark rate.
What comes next in Congress
Both S.381 and H.R.1944 were referred to their respective banking and financial services committees, where they await further action. Committee chairs will decide whether to hold hearings, solicit testimony from regulators and industry representatives, or schedule markups that could amend the bills’ text. Even with bipartisan sponsors, any nationwide usury ceiling faces significant opposition from lenders and some lawmakers who prefer market-based rate setting.
For now, the proposals serve as a marker in the broader debate over how far Congress should go in reshaping the credit card market. If the 10% cap advances, it would represent one of the most aggressive federal interventions in consumer credit pricing in decades. If it stalls, its core ideas-lower rate ceilings, stronger enforcement, and closer scrutiny of fee-based revenue-are likely to resurface in future legislative sessions as policymakers continue to grapple with rising card debt and persistent delinquencies.
