Republican calls for credit card APR to max out at 18%: Senator Josh Hawley demands a cap to stop rates soaring to 24% and debt hitting $1 trillion

Senator Josh Hawley has a new populist proposal that eschews the laissez-faire Republican economics of old: He wants to put an 18 percent cap on credit card interest rates.

The Missouri Republican pounced on rising interest rates — which reached an average of 28 percent this week, just as U.S. credit card debt levels surpassed $1 trillion.

In comments on RealClearPoliticsHawley noted that the administration was “quick to bail out the banks this spring,” pointing to Silicon Valley Bank of California and Signature Bank of New York, but has “ignored the working people who are struggling to get ahead.”

He targeted credit card issuers directly: “We know what they’re doing.”

“They’re actively encouraging and finding new ways to get consumers into debt — they’re raising interest rates, and they can make a killing doing it,” Hawley said.

Placing a cap on the annual interest rate on credit cards would be a “fair” and “common sense” way to “give the working class a chance,” Hawley said.

President Biden has made eliminating credit card fees a focus of his administration, but Hawley’s proposal moves even further to the left.

It aligns him with Democratic Socialists Rep. Alexandria Ocasio-Cortez, D-N.Y., and Sen. Bernie Sanders, I-Vt., who introduced the Loan Shark Prevention Act in 2019 to cap credit card APRs at 15%.

In comments to RCP, Hawley defended his proposal: “We have a long history in this country of statutes, at the state and federal levels, that prevent what we used to call usury – an old-fashioned word for ripping off working people, and we need to get back to work.’

The Missouri Republican pounced on rising interest rates — which reached an average of 28 percent this week just as U.S. credit card debt surpassed $1 trillion

Hawley has led the charge against the Republican Party’s criticism of the business-friendly policies it has embraced above all else for decades. He has proposed legislation that would cap insulin prices at $25 and favors a wage subsidy proposal that would use federal dollars to raise the minimum wage. .

According to the Federal Reserve Bank of New York, credit card balances increased by $45 billion between the first and second quarters of 2023, pushing total credit card debt past the $1 trillion mark.

Credit card delinquencies have also risen, reaching the 5 percent mark in July, the Fed said.

A spokesperson for the American Banker’s Association (ABA) told DailyMail.com of the proposal: “Price controls don’t work.”

“This proposal would harm consumers by limiting access to credit for those who need it most and driving them toward less regulated, more expensive alternatives.”