The Assault on Credit Cards

Interest Rate Caps

Credit markets have transformed America, allowing countless businesses and families to finance their futures. Nearly 80 percent of Americans own a credit card, and an astounding 94 percent of these consumers value the convenience of ready access to funds. Economist Steve Moore said it best: “access to credit has been almost fully democratized. Everyone is using them.” President Trump’s unfortunate new proposal to cap interest rates threatens to disrupt that convenient capital. On January 9, the President posted on Truth Social that he is “calling for a one year cap on Credit Card Interest Rates of 10%” effective January 20 to prevent Americans from being “ripped off” by credit card companies. Trump also told credit card companies that they’d be breaking the law by charging more than 10 percent interest. The truth is that card companies are providing a service that is overwhelmingly popular and pivotal for economic growth. Instead of cutting credit cards, President Trump can help borrowers
by ditching costly regulations.

For millions of Americans struggling to make ends meet, credit cards and various loan services can offer a helpful hand up. Lenders have been eager to extend credit, albeit at higher prices—or interest rates—charged to risky borrowers at risk of default. Resulting financial services markets have lifted people out of poverty around the world. According to a sweeping 2022 analysis by Bangladeshi and Japanese economists examining data from 156 countries, there’s a close relationship between “a steady increase in financial inclusion [e.g., access to credit markets] and a continuous drop in the poverty rate.” Interest rate caps harm that progress by making it impossible for lenders to recoup losses from high-risk borrowers. Interest rate caps will not result in lower prices, but they will result in far fewer people having credit. As the Electronic Payments Coalition found in a recently-released study, “nearly 90% of current cardholders – between 175-190 million Americans – would effectively lose
access to credit” under a 10 percent cap. Further, “All remaining cardholders — regardless of credit score — would face lower credit limits, tighter underwriting standards, and reduced or eliminated rewards.”

Lenders have little issue with offering struggling low-credit-score households a second chance, but the books simply won’t balance with a maximum 10 percent interest rate. Instead of pursuing a heavy-handed approach, policymakers could ease credit regulations in ways that expand access to legitimate and transparent borrowing for people teetering on the financial brink. One option is to modernize ability-to-repay and underwriting rules to better reflect real-world income patterns. Many struggling Americans have irregular earnings—gig work, seasonal jobs, or fluctuating hours—that traditional underwriting models discount or ignore. Regulators could provide safe harbors allowing banks and credit unions to use alternative data (such as verified cash-flow, utility payments, or rental history) without heightened supervisory risk. Lawmakers could also expand regulatory sandboxes and pilot programs that let lenders test innovative and lower-cost credit products without fear of retroactive
enforcement, while still enforcing core anti-fraud and disclosure rules. In contrast, taking the rigid approach of capping credit card interest rates will almost backfire and make life harder for millions of Americans. Households need choice, convenience, and flexibility, not red tape.

Credit Card Competition Act

Sens. Roger Marshall (R-Kansas) and Dick Durbin (D-Ol.) are still desperately trying to get the misguided Credit Card Competition Act (CCCA) to pass. The CCCA would give the Federal Reserve complete control over American payment networks while stripping cardholders of rewards and security. Americans increasingly rely on rewards and the extra protection provided by paying with credit to get by. The legislation is based on false pretenses of anti-competitive practices and is being pushed by corporate competitors with little regard for consumers who rely on the benefits provided by their cards. The central premise of the bill—that the credit card market lacks competition—is unfounded. As of 2025, 152 companies in the United States issue credit cards. Between 2020 and 2025, market entry has grown at an average annual rate of 8.1%. This kind of steady growth does not indicate a broken market, but rather a dynamic and competitive system that continues to serve consumers well. If passed, the CCCA
would jeopardize that progress. Fraud rates, already on the rise, would skyrocket. Unvetted payment processors would be handed vast troves of sensitive consumer data. The only beneficiaries of using these cheaper alternatives are the retailers, who lack a vested interest in cardholder safety. Meanwhile, smaller institutions—including community banks and credit unions—would see revenue streams dry up.

Worse still, the bill would also end the ability of banks and credit unions to operate popular credit card rewards programs. These programs are funded largely by the interchange fees charged by payment processors. When Durbin succeeded in passing his debit card price controls, consumers lost card benefits and experienced no savings. According to The Wall Street Journal, “Debit-card rewards programs have nearly disappeared since the Durbin amendment, part of the 2010 Dodd-Frank law that cut retailers’ fees nearly in half. Stores didn’t pass the savings to customers, while the banks that issue the cards found other ways to recoup revenue. A recent poll showed that 79% of cardholders use rewards cards, and more than half (58%) use those rewards regularly. Rewards are a tool ([link removed]) many families and businesses rely on to make purchases while also earning cash back.

Minnesota’s Wake-Up Call for Medicaid Reform

Governor Tim Walz (D) of Minnesota has made the decision to withdraw from his reelection campaign amid a series of “industrial-scale” fraud scandals. While the full extent of losses to taxpayers still isn’t known, federal prosecutors estimate that the Medicaid-related scandal alone could surpass $9 billion, drawing intense national scrutiny and impacting the state’s political landscape. It’s long past time for accountability for the politicians and bureaucrats who allowed this mess. A viral social media video by YouTuber Nick Shirley exposed a massive fraud scheme in Minnesota in late December 2025, involving federal and state aid programs that were abused and from which funds were stolen. While Shirley directed the focus of his investigation toward childcare centers that didn’t actually care for children, a variety of taxpayer-funded programs in Minnesota—including autism centers and non-emergency medical ride services for the elderly—have also been defrauded.

In addition to the scandalous payments to phony childcare centers, the scale and extent of the fraud highlight the urgent need for Medicaid reform. The national program lacks sufficient oversight, exposing taxpayer dollars to potential fraud, waste, and abuse. One major issue with Medicaid, which is jointly financed by states and the federal government and administered by states, is that the federal government’s role has grossly expanded and lacks oversight. Under the Affordable Care Act (ACA), the federal government paid 100 percent of the cost of expansion coverage for patients under Medicaid from 2014 to 2016. By 2020, the federal government reduced funding to 90 percent of new enrollee costs, with states paying the remaining 10 percent. Even with the federal phasedown, overall Medicaid expansion has opened the floodgates to fraud, waste, and abuse of taxpayer dollars. According to the Government Accountability Office, Medicaid is a significant driver of “improper payments” with faulty
payment rates eclipsed only by Medicare.

Waste and abuse in the welfare state aren’t limited to Medicaid. The General Welfare Clause (Article I, Section 8) of the U.S. Constitution, which reads: “The Congress shall have the Power to lay and collect Taxes … to pay the Debts and provide for the common Defence and general Welfare of the United States,” has been grossly misinterpreted. As Cato’s Institute’s vice president for legal affairs, Roger Pilon, notes, “the Constitution was written and ratified to both authorize and limit the government created through it. It was designed to do the latter, not through the Bill of Rights — that was an afterthought, added two years later — but through the doctrine of enumerated powers. Article I, section 8, grants Congress only 18 powers. Nothing for education, or retirement security, or health care: Those responsibilities were left to the states or to the people, as the Tenth Amendment makes clear.” The federal government spends more than $1 trillion per year on more than 134 different welfar
e programs. The federal government must significantly reassess the scale of these programs and embrace an approach consistent with the Constitution that limits bureaucracy and keeps waste and fraud at bay. Hopefully, “industrial scale” fraud is a wake-up call for policymakers to protect taxpayers and limit government.

Blogs:

Monday: Government Watchdog Criticizes Proposed Credit Card Interest Rate Caps ([link removed])

Tuesday: Changes to Vaccine Schedule Harm Patients ([link removed])

Wednesday: The 2026 Budget Deadline and Washington’s Fiscal Reckoning ([link removed])

Thursday: The Quiet Expansion of a Useless Hiring Subsidy ([link removed])

Friday: TPA Urges Amendments to Washington’s Sports Wagering Regulations ([link removed])

Media:

January 8, 2026: Townhall ran TPA’s op-ed, “The Center for Medicare and Medicaid Innovation Fails Taxpayers and Patients.”
January 8, 2026: The Lakeland Times (Minocqua, Wisc.) mentioned TPA in their story, “Grothman bill would curb federal emergency spending”
January 8, 2026: I appeared on WBFF Fox45 (Baltimore, Md.) to talk about Maryland’s population loss due to the political and fiscal climate.
January 8, 2026: WBFF Fox45 (Baltimore, Md.) mentioned me in their story, "Sinkhole chaos: Lake Montebello repair costs triple; city demands answers."
January 8, 2026: Yahoo! News and 4 other sources mentioned TPA in their story, “Gov. Moore pitches significant school funding hike amid $1.4B shortfall.”
January 10, 2026: Southern Maryland News (California, Md.) and 3 other sources mentioned TPA in their story, “Letter to the Editor: Benefit the needy, not the greedy.”
January 12, 2026: KSLA News (Shreveport, La.) mentioned TPA’s testimony against Senate Bill 2420 and App Store age verification in their news segment.
January 12, 2026: I appeared on WBFF Fox45 (Baltimore, Md.) to talk about the excessive cost of Maryland’s Baltimore peninsula development.
January 13, 2026: Inside Sources (Washington, D.C.) ran TPA’s op-ed, “Rand Paul’s Plan to Expand Healthcare Choice Is a Win for America.”
January 13, 2026: The Baltimore Sun (Baltimore, Md.) mentioned me in their story, "Maryland Public Television 'committed' to lifelong learning after federal funding ends."
January 13, 2026: The Baltimore Sun (Baltimore, Md.) mentioned me in their story, "Baltimore Opioid Restitution Fund plans to give $11 million to 3 delinquent nonprofits, data shows."
January 13, 2026: Memphis Morning News (WKIM) interviewed Ross Marchand for their news segment on capping credit card interest rates.
January 14, 2026: The Boston Herald (Everette, Ma.) ran TPA’s op-ed, “Smith: Rand Paul has winning plan for healthcare coverage.”
January 14, 2026: Inside Sources (Washington, D.C.) ran TPA’s op-ed, “Pet Care Costs are Rising, but Not Because of Private Equity”
January 14, 2026: KOA-AM ABC News Radio (Denver, Co.) interviewed Ross Marchand for their news segment on tariffs.
January 14, 2026: The Ross Kaminsky Show interviewed Ross Marchand for their news segment on capping credit card interest rates.
January 14, 2026: NewsTalk STL (St. Louis, Mo) interviewed Ross Marchand for their news segment on the tariff Supreme Court case and banning congressional stock trading.
January 14, 2026: Baltimore Sun (Baltimore, Md.) ran TPA’s op-ed, "The FDA’s growing addiction to ‘no’."
January 14, 2026: Real Clear Markets ran TPA's op-ed, "Credit Card Rate Caps Are Bad News for Individuals and Businesses."
January 15, 2026: Frederick News-Post (Annapolis, Md.) ran TPA’s op-ed, “Pet Care Costs are Rising, but Not Because of Private Equity.”
January 15, 2026: WBOB-AM (Jacksonville, Fl.) interviewed me for their news segment on credit card mandates and price controls.
January 15, 2026: I appeared on WBFF Fox45 (Baltimore, Md.) to talk about Maryland’s 2026 budget and long-term solutions to their $1.5B deficit.

Have a great weekend!

David Williams
President
Taxpayers Protection Alliance
1101 14^th Street, NW
Suite 500
Washington, D.C.
Office: (202) 930-1716
Mobile: (202) 258-6527
www.protectingtaxpayers.org

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