The American Financial Services Association (AFSA) has announced its opposition to a proposed 10% cap on credit card annual percentage rates. The association joined other financial trade organizations in expressing concerns about the potential negative impacts of such a measure.
Amendment 2239 to Senate Bill 1582, introduced by Senator Josh Hawley of Missouri, proposes this cap as part of the broader GENIUS Act. This act primarily focuses on regulating payment stablecoins but includes the APR cap as a consumer protection measure. According to the American Bankers Association, the proposed rate ceiling could significantly restrict credit access for consumers and small businesses that depend on flexible revolving credit lines.
Research indicates that interest rate caps often reduce access to credit, particularly for higher-risk borrowers. A study cited by the Consumer Bankers Association found that after Illinois implemented a 36% APR cap, subprime loan volumes dropped significantly, leading many consumers to turn to less regulated or unregulated alternatives. The report emphasizes that while these caps aim to protect consumers, they can inadvertently push borrowers toward more costly and risky financial products.
Credit card delinquency rates have been rising, indicating increasing financial stress among consumer groups. According to the Federal Reserve Bank of St. Louis, the delinquency rate for credit card loans reached 3.05% in the first quarter of 2025, continuing an upward trend from previous quarters. These figures suggest that even without APR caps, some consumers are struggling with existing debt management, and tighter credit availability could exacerbate these issues.
AFSA is a national trade association representing the consumer credit industry and is based in Washington, D.C. Founded in 1916, it advocates for policies that expand access to responsible credit while representing institutions such as auto finance firms, personal loan providers, and credit card issuers.