Bankers push back on Trump’s plan to reduce swipe fees, cap interest rates

By Brett Rowland
The Center Square

Banks are pushing back against renewed efforts to cap interest rates for consumers, after President Donald Trump endorsed the move as he seeks to show Americans he’s working to make life in America more affordable ahead of the 2026 midterms.

Trump recently called for a 10% cap on credit card interest rates for a year and has endorsed the bipartisan Credit Card Competition Act, which would require big banks to enable at least two unaffiliated card networks, including one other than Visa or Mastercard. The goal is to increase competition and lower swipe fees, which credit card issuers charge to process transactions. Retailers, including the National Retail Federation, support the Credit Card Competition Act.

The president said banks are overcharging.

“We will no longer let the American Public be ‘ripped off’ by Credit Card Companies that are charging Interest Rates of 20 to 30%, and even more, which festered unimpeded during the Sleepy Joe Biden Administration. AFFORDABILITY!,” Trump wrote in a recent social media post.

The president also encouraged Congress to pass the Credit Card Competition Act to “stop the out of control Swipe Fee ripoff.”

The American Bankers Association and other credit card issuers called the measure “misguided” and a “surefire way to make life less affordable for Americans.” The group also said the measure would spell the end of credit card reward programs.

“Lawmakers have rightly rejected past attempts at legislation and amendments to mandate the reengineering of the nation’s trusted, resilient and efficient credit card payments system just to boost the profits of the nation’s largest retailers,” a coalition of banking groups wrote in a statement. “This Congress should again reject this harmful proposal. Anyone supporting Durbin-Marshall is voting to make credit card transactions less secure and to take away the credit card reward programs that make life more affordable for millions of Americans.”

U.S. Sens. Dr. Roger Marshall, R-Kansas, and Dick Durbin, D-Illinois, reintroduced the Credit Card Competition Act to end “the Visa-Mastercard duopoly that is squeezing small businesses – and, ultimately, consumers.”

Marshall and Durbin said Visa and Mastercard control about 85% of the credit card market and won’t negotiate with retailers. They said the average American family pays nearly $1,200 per year in swipe fees, while banks take in $111.2 billion annually from swipe fees.

“The average American family is being ripped off by Big Banks, who profit billions from swipe fees while hardworking Americans pay the price. It’s time to bring real competition to a credit card network market dominated by Visa and Mastercard – and drive down the cost of everyday goods,” Marshall said.

Tommy Aiello, senior director of government affairs at the National Taxpayers Union, said the Credit Card Competition Act could hurt consumers if card issuers are forced to charge higher fees, cut popular reward programs or limit access to credit. He said Trump’s endorsement changed the tone of talks in Washington.

“The president throwing his support out there is definitely dropping a bomb on what was a pretty stagnant conversation,” Aiello told The Center Square.

Trump also said that next Tuesday he would call for a 10% cap on credit card interest rates for one year.

Aiello said price caps have backfired in the past, pointing to gasoline shortages in the 1970s. If Trump were to issue an executive order on cap credit card interest rates, Aiello said he’d expect a legal challenge. He also said the cap wouldn’t help the millions of Americans who don’t carry credit card balances.