DCUC Voices Concerns Over Proposed Credit Card Interest Rate Cap

​WASHINGTON, D.C. – Today, the Defense Credit Union Council, DCUC, sent a letter to Senator Bernie Sanders expressing concerns about his proposal to impose a 10% cap on credit card interest rates. DCUC emphasized that while the proposal is well-intentioned, it would likely have unintended consequences, including reduced access to credit for underserved communities, diminished flexibility for credit unions, and a contraction of affordable financial services.

DCUC’s letter highlighted the disproportionate impact such a cap would have on credit unions and their members, particularly those in low-income and military communities.

“A federally imposed 10% interest rate cap would hinder credit unions’ ability to serve their members, forcing many to tighten lending criteria or discontinue credit card offerings altogether for higher-risk borrowers,” said Jason Stverak, DCUC Chief Advocacy Officer. “This would leave vulnerable populations with fewer financial options and could drive them toward predatory lenders.”

Key concerns outlined in DCUC’s letter include:

Harming Underserved Communities: Credit unions, particularly those serving low-income populations, would face increased challenges in offsetting the risks and costs of lending.

Reducing Access to Small-Dollar Loans: Many credit unions offer small-dollar lending options to help members manage emergencies, which could become unsustainable under a strict cap.

Weakening Military Financial Support: Defense credit unions, which provide tailored financial services and education to military families, would struggle to maintain critical offerings like low-rate credit cards and emergency loans.

DCUC urges policymakers to consider targeted alternatives, such as expanding support for financial education, promoting responsible lending models, and addressing exploitative practices by predatory lenders.
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“Credit unions are committed to advancing financial inclusion responsibly,” Stverak added. “We welcome the opportunity to collaborate on solutions that protect consumers without limiting access to affordable credit.”

For more information, please contact Jason Stverak at [email protected].