SFA Research Corner: Mandatory Credit Card Rate Cap: Signal and Substance

President Trump’s proposed one-year 10% cap on credit card interest rates revives a familiar policy debate at a time of rising delinquencies, but key details remain unresolved. Although January 20 had been cited as a potential effective date, that deadline has passed without further clarification on scope or implementation. A broad mandatory cap would have far wider implications for credit availability and for credit card ABS, which rely on interest income and excess spread to absorb losses and protect investors. For now, markets are not pricing in near-term stress, but the ultimate impact will depend on how any cap is designed, implemented, and adopted in practice.