As Tennessee and Mississippi credit unions continue to serve as the bedrock of financial stability for our local communities, we are closely monitoring a significant shift in the federal landscape. President Trump has recently intensified his call for a nationwide 10% cap on credit card interest rates, moving the conversation from social media to the global stage in Switzerland.
From Truth Social to Davos: A Strategic Shift
The proposal first gained traction on January 9, when the President posted on Truth Social calling for a one-year, 10% cap to take effect on January 20, 2026. He framed the initiative as a direct response to “usurious” rates of 20-30% that he argues are “ripping off” the American public.
Today, speaking at the World Economic Forum in Davos, Switzerland, the President escalated this demand. He explicitly called on Congress to pass legislation mandating the 10% ceiling, arguing that high interest debt is the primary barrier preventing American families from saving for home down payments.
“I’m asking Congress to cap credit card interest rates at 10% for one year… They go out there a little late in their payment, and they end up losing their house. It’s terrible.”
— President Donald J. Trump, Davos Speech, Jan 21, 2026
Today’s House Financial Services Committee Markup
We were told overnight that Ranking Member Waters intends to offer the 10% rate cap as an amendment in today’s House Financial Services Markup. We are watching the markup closely and will keep you posted on where that leads.
What This Means for Tennessee and Mississippi Credit Unions
While the President’s rhetoric targets “big credit card companies,” the reality is that an arbitrary, one-size-fits-all cap would have profound implications for the credit union movement here in the Volunteer State.
Impact on Subprime Access: Analysis from America’s Credit Unions suggests that a 10% cap would make unsecured lending unviable for nearly 47 million subprime borrowers nationwide. For many Tennessee members with “thin” or rebuilding credit, this could mean an immediate loss of access to their primary safety net.
The CU Advantage at Risk: As of early 2026, credit union average rates for classic cards sit at 12.87%—already significantly lower than the banking average of 16.07%. However, even these mission-driven, non-profit rates would fall outside the proposed 10% legal limit.
Operational Shifts: To offset the risk that a 10% rate cannot cover, institutions may be forced to tighten underwriting standards, reduce credit limits, or consider new service fees to maintain the sustainability of their card programs.
Our Advocacy Stance
The Tennessee Credit Union League, in coordination with national partners, is actively engaging with our Congressional delegation to highlight the “unintended consequences” of this proposal. Our message is clear: affordability should not come at the cost of accessibility.
We are advocating for:
- Focus on Financial Education: Credit Unions are the original source of affordability for Tennesseans.
- Data-Driven Solutions: Opposing the “Credit Card Competition Act” and other measures that threaten the interchange system that funds fraud protection and member rewards.
Next Steps for Members
We encourage all Tennessee and Mississippi credit union leaders to remain vigilant. We will activate advocacy leaders in the coming days if the need arises. Stay tuned.
