In a move that has confused pundits and delighted populists, Donald Trump has announced a 10% cap on credit card interest rates—a policy nearly identical to one proposed by Senator Bernie Sanders. The announcement came via Truth Social on Friday night, with Trump declaring that the cap would take effect on January 20. The decision effectively co-opts a key plank of the progressive economic platform, positioning Trump as a defender of the working class against Wall Street “extortion.”
The backstory to this announcement is filled with political irony. In early 2025, Sanders and Republican Senator Josh Hawley introduced a bipartisan bill to cap rates at 10%, citing the need to stop “loan sharking.” That bill failed due to banking industry opposition. Now, Trump has bypassed the legislative process to announce the same cap by executive fiat, just hours after Sanders criticized him for being too cozy with banks.
The banking lobby remains the primary obstacle. In a strongly worded statement, associations representing the nation’s largest banks warned that the cap would be “devastating” for credit access. They argued that the cost of lending to subprime borrowers exceeds a 10% return, meaning banks would have no choice but to stop lending to that segment of the population. This, they claim, would drive vulnerable consumers toward predatory lenders.
Senator Elizabeth Warren focused her critique on the legality of the move. She called the announcement a “joke,” arguing that a president cannot simply tweet a price control into law. Warren emphasized that without an act of Congress, Trump’s declaration is likely unenforceable. She accused him of offering false hope to desperate families while refusing to do the hard work of governing.
Despite the legal and economic questions, the move has reshaped the political landscape. Senator Hawley praised the decision as a “fantastic idea,” cementing the alliance between Trump and the populist right. As the country waits for January 20, the question is whether this policy is a serious attempt at reform or a political stunt designed to steal the headlines.