Many in the industry entered 2026 expecting a period of thoughtful regulatory reform – incremental, pragmatic, and potentially constructive for the banking sector. Instead, midway through the first month of the year, the outlook is becoming far more uneven. While certain areas may see modest regulatory relief, payments and consumer credit are shaping up to face a period of material disruption, with significant second and third-order consequences for consumers, issuers, and merchants alike.
Within two weeks of the start of the new year, President Trump publicly targeted credit card issuers, posting on Truth Social: “Effective January 20, 2026, I, as President of the United States, am calling for a one-year cap on Credit Card Interest Rates of 10%.” In subsequent remarks to reporters, he escalated the rhetoric, stating that issuers failing to comply would be “in violation of the law.” These comments were framed as an affordability measure for American households and positioned as a continuation of campaign promises.
Less than a week later, the President amplified pressure on the payments ecosystem by endorsing the Credit Card Competition Act, posting: “Everyone should support great Republican Senator Roger Marshall’s Credit Card Competition Act, in order to stop the out-of-control Swipe Fee ripoff.” While no executive order or enacted legislation accompanied these statements, their immediate effect was unmistakable.
Financial institutions rapidly mobilized internal teams to assess the implications of a potential interest rate cap and renewed card network regulation. Both the Credit Card Competition Act and a 10% interest rate cap have now moved from theoretical policy risks to issues that must be actively incorporated into strategic planning scenarios.
Overview of the Two Policy Proposals
Credit Card Competition Act (S.1838 / H.R.3881)
Reintroduced on January 13 by Senators Dick Durbin and Roger Marshall, this bill claims to increase competition among credit card networks. The bill would require banks with more than $100 billion in assets to enable at least two unaffiliated networks for credit card transactions, including one network that is neither Visa nor Mastercard (until such time as Mastercard is no longer the #2 credit card network). The stated objective is to reduce interchange costs borne by merchants through increased network routing competition, echoing part of the framework of the Durbin Amendment applied to debit routing (note: the Durbin Amendment also capped debit interchange for issuers with >$10B in assets, whereas the CCCA stops short of specifically addressing credit interchange). President Trump publicly endorsed the legislation on the day of its reintroduction, materially changing its political profile.
10% Interest Rate Cap Act (S.381 / H.R.1944)
Introduced by Senator Bernie Sanders and Representative Alexandria Ocasio-Cortez, it would amend the Truth in Lending Act to cap credit card APRs at 10% and prevent lenders from offsetting the cap through ancillary fees. While the bill has existed for some time, President Trump’s recent call for an immediate, one-year implementation has revived attention. The White House is reportedly exploring executive action to accelerate its adoption, though significant legal and operational hurdles remain.
Potential Beneficiaries
Merchants
Card-accepting merchants are the most obvious beneficiaries of the CCCA. If increased routing competition drives meaningful interchange reductions, merchant margins could improve. However, historical experience under Regulation II suggests that cost savings are generally not passed on to consumers, despite frequent claims to the contrary.
American Express and Capital One
These large issuers may find relative advantage under the current drafting of the CCCA, which effectively excludes credit cards issued by American Express and Discover (including Capital One cards now issued on the Discover network), though the offsetting impact of a 10% interest cap would be unclear. American Express and Capital One would be uniquely positioned to support large cobrand programs as the exemption from the legislation would likely give both issuers larger revenue pools to share with their partners.
Most Likely Losers
U.S. Consumers
Everyday consumers are most at risk of unintended harm. While a 10% interest cap may provide short-term benefit, underwriting will tighten, causing marginal and non-prime consumers to lose access to credit altogether. Others may never qualify in the first place.
These consumers are likely to migrate to more expensive and less regulated alternatives, including non-bank loans, overdraft reliance, or informal credit arrangements. The rapid mass reduction in consumer credit is likely to impact the overall economy, with a measurable effect on GDP growth. So, any merchant benefits from increased routing competition will at least be partially offset by reductions in consumer spending.
Card Issuers
Financial institutions will face significant pressure on profitability. Sustained margin compression could lead many to exit credit cards entirely or outsource it to third parties. Increased consolidation will result in a more concentrated credit card market, which could adversely impact consumers and merchants alike. Rewards cards may become economically untenable, no-fee products may require new fee structures, and smaller or regional issuers may find it increasingly difficult to compete.
Over time, this could accelerate industry consolidation, reducing consumer choice rather than enhancing it. While certain issuers with less than $100B in assets may see short-term benefit with an exemption from the CCCA, card network actions to win routing for covered issuers will likely impact smaller card issuers as well. The evidence to support this assertion comes from Reg II. Following the implementation of Reg II, certain networks have paid higher interchange for covered issuers relative to exempt issuers, despite the interchange cap for covered issuers.
Probable Legislative Paths
Credit Card Competition Act
It has a clearer, though still challenging, path forward. It has bipartisan sponsorship (and now presidential support), and builds on precedent created by the Durbin Amendment. The primary question is whether leadership will grant the bill floor time rather than allowing it to stall in committee, as prior iterations have done.
President Trump’s endorsement materially improves the bill’s political viability, particularly among Republicans who were previously reluctant to align with Senator Durbin on banking and payments policy. Industry opposition remains formidable, with issuers, networks, and travel and airline groups warning of reduced rewards, higher fraud risk, and degraded consumer experience. Merchants will counter with arguments around cost reduction and competition.
The most plausible path forward is inclusion in a larger legislative vehicle – a must-pass bill or broader cost-of-living package – rather than standalone passage. On balance, the CCCA has moved from a low-probability issue to one that warrants close monitoring.
10% Credit Card Interest Rate Cap Act
This scenario faces a far steeper climb. Moving from rhetoric to reality would require detailed legislative language, committee support, and a credible framework for how it would work to get broad support among Republicans. As of today, there is little consensus on scope, duration, exemptions, or enforcement.
The opposition arguments are well established. Banks will argue that a 10% cap necessitates credit rationing and broad exits from higher-risk segments. JPMorgan Chase CFO Jeremy Barnum articulated this clearly on the company’s first-quarter earnings call, warning that such a cap would cause “very, very extensive and broad” loss of credit access, particularly for those who need it most, with negative consequences for consumers and the broader economy. Consumer advocates warn of migration to worse alternatives. Regulators quietly flag safety and soundness concerns.
Historically, proposals of this nature function more effectively as pressure mechanisms than as statutes. They shape negotiations, extract concessions, and reframe policy debates. It is conceivable that this proposal could be used to push toward a higher, politically palatable cap – perhaps in the high teens – rather than 10%.
More likely, it will serve as a signaling tool: influencing issuer behavior, fueling hearings, and reinforcing affordability narratives without ever being enacted in its proposed form. It may also support broader “unbanking” or anti-Wall Street initiatives advanced by the current administration.
The Bottom Line
Much remains uncertain, including whether action takes the form of executive orders, legislation, or a coordinated pressure campaign. While the administration has signaled a desire for action in the first quarter of 2026, consensus expectations suggest that material changes in that timeframe are unlikely. A more probable outcome is sustained pressure across social, regulatory, and legislative channels aimed at accelerating behavioral change by issuers, particularly as the 2026 midterm elections approach.
What is clear is that these issues can no longer be treated as peripheral. Financial institutions must incorporate realistic scenarios into strategic planning and stress-testing processes. The irony is that consumers, the intended beneficiaries, are likely to bear the greatest long-term harm through reduced access to credit, diminished rewards, and increased reliance on higher-cost, less consumer-friendly alternatives.
Finally, engagement matters. Merchant lobbying groups are already mobilizing to capitalize on this momentum. Issuers must ensure their perspectives, data, and consumer impact narratives are clearly and forcefully communicated to state and federal legislators. Silence will be interpreted as acquiescence.
Dive deeper into this and other regulatory and policy waves in our recent PL! discussion with Fiserv’s Kimberly Ford:
Keith Ash, Managing Director, brings three decades of experience in the banking industry, advising leading financial institutions with complex contract negotiations, mergers and acquisition strategies, and other strategic initiatives. Further inquiries may be made by emailing Keith at kash@srmcorp.com.
Bob Rohr, Managing Director, has nearly 20 years of experience in payments and financial services strategy as both a consulting practitioner and executive. Rohr has extensive knowledge of enterprise payments strategy, payment growth and pricing strategies, strategic sourcing, and strategic planning. Further inquiries may be made by emailing Bob at brohr@srmcorp.com.
Posted by Keith Ash and Bob Rohr on January 26, 2026.
