Elizabeth Warren and Donald Trump just had a phone conversation that could reshape American consumer finance, despite years of bitter political warfare between them.
Story Snapshot
- Trump proposed capping credit card rates at 10% for one year via Truth Social post
- Warren called Trump out in a Monday speech, prompting him to phone her directly
- The unlikely duo discussed bipartisan legislation to limit credit card interest rates
- Banking industry warns the cap would devastate credit availability for millions
- Republican-controlled Congress remains the biggest obstacle to any rate cap legislation
When Political Enemies Find Common Ground
The woman Trump nicknamed “Pocahontas” and the president she’s spent years attacking just discovered they agree on something big. Warren has championed credit card rate caps for years as part of her consumer protection crusade. Trump floated the idea about a year ago but never acted. His Friday Truth Social post changed everything, reviving the 10% cap proposal with newfound urgency.
Warren wasted no time responding. Her Monday morning speech criticized Trump’s past inaction on affordability while challenging him to actually fight for the legislation this time. The speech worked—Trump called her that same day to discuss pushing Congress for action.
The Banking Industry Fights Back Hard
Banks reacted swiftly and forcefully to Trump’s proposal, with stock prices dipping immediately after his announcement. The American Bankers Association and credit card issuers launched a coordinated opposition campaign, warning that a 10% cap would prove “devastating” for families and small businesses by cutting off credit access to higher-risk borrowers.
Their argument centers on basic economics: if banks can’t charge higher rates to offset risk, they simply won’t lend to people with poor credit histories. This could create a two-tier system where only prime borrowers maintain access to credit cards, while millions of Americans lose borrowing options entirely. The industry’s fierce resistance signals they view this as an existential threat to their business model.
Republican Congress Poses Biggest Hurdle
Even with Trump’s endorsement, the proposal faces steep odds in a Republican-controlled Congress traditionally aligned with banking interests. A handful of GOP lawmakers like Senator Josh Hawley and Representative Anna Paulina Luna have previously supported similar caps, but they represent a small minority within their party.
Warren understands the political reality, telling reporters that “Congress can pass legislation to cap credit card rates if Trump will actually fight for it.” Her emphasis on fighting suggests she knows Trump must actively pressure reluctant Republicans rather than simply offering rhetorical support. The test will be whether Trump spends political capital on an issue that puts him at odds with a powerful industry.
What This Means for American Consumers
Credit card interest rates currently hover between 20-30% for most consumers, making the proposed 10% cap a potentially massive financial relief for millions of families. For someone carrying $5,000 in credit card debt, the difference between 25% and 10% interest rates could save hundreds of dollars annually in interest payments alone.
However, the banking industry’s warnings about reduced credit availability aren’t entirely unfounded. Lenders might compensate for rate caps by tightening approval standards, requiring higher credit scores, or adding new fees. The ultimate question becomes whether helping current cardholders with lower rates justifies potentially denying credit access to future applicants who need it most.
Sources:
Sen. Elizabeth Warren says Congress could work with Trump to cap credit card rates – CBS News
Trump phones Warren on affordability – Politico
