Whitehouse, Warren, Merkley, Reed Introduce Bill to Empower States to Protect Americans from High Credit Card Interest Rates

Legislation to restore states' ability to cap consumer loan interest rates reintroduced after Trump calls for cap

Washington, D.C. - U.S. Senators Sheldon Whitehouse (D-RI), Elizabeth Warren (D-MA), Jack Reed (D-RI), and Jeff Merkley (D-OR) introduced legislation to protect Americans from sky-high interest rates for credit cards and other consumer loans. The Empowering States' Rights to Protect Consumers Act would restore states' ability to limit consumer loan interest rates for their residents and help address the record $1.23 trillion Americans hold in credit card debt.

"Too many Rhode Islanders are stuck under a mountain of credit card debt that is driven ever-higher by compounding interest rates and fees dictated by corporations," said Senator Whitehouse. "Our bill will restore to states the ability to protect their own citizens from predatory rates and help get families more breathing room on their credit card bills."

American families are drowning in credit card debt. According to the Federal Reserve Bank of New York, balances hit a record $1.23 trillion in late 2025, as average interest rates climbed to nearly 22 percent. President Trump recently called for a one-year cap on credit card interest rates of 10 percent.

From Senator Warren, Ranking Member of the Senate Committee on Banking, Housing, and Urban Affairs: "Americans are struggling under mountains of credit card debt with astronomically high interest rates of 25, 30, even 35%. Congress must act to bring down those interest rates at a federal level - but it's also critical that states have the ability to deliver relief. Anyone who supports lowering costs for Americans should support this bill to allow states to do their jobs."

"Allowing billionaire corporations to prey on working families hurts our entire economy, trapping hardworking Americans in the quicksand of debt," said Senator Merkley. "We need to stand up for consumers and empower states to put in place protections to help break this cycle of debilitating debt for families across the nation."

"Costs are rising, and stubbornly high credit card interest rates have trapped too many Americans with devastating amounts of debt. We need to empower states to protect their residents from these abuses and help them chart a realistic course for financial security," said Senator Reed.

Since the country's founding, each state had the ability to enforce usury laws against any lender doing business with its citizens. That changed with the Supreme Court's 1978 decision in Marquette National Bank of Minneapolis v. First of Omaha Service Corporation, which ruled that a national bank is bound only by the lending laws of the state in which the bank is based. This rendered states powerless to impose lending restrictions against lenders headquartered in other states. The decision effectively ended usury protections in the United States, as big banks reorganized as "national banks" and moved to states with weak or non-existent consumer lending protections. Today, credit card divisions of major banks are in just a few states, consumers nationwide lack protection from excessive rates and fees, and local banks face unfair out-of-state competition.

The Empowering States' Rights to Protect Consumers Act would restore the pre-Marquette powers of each state to protect its citizens with interest rate limits on national bank lending done within the state. In doing so, it levels the playing field so that intrastate lenders like community banks, local retailers, and credit unions are no longer bound by stricter lending limits than national credit card companies. For example, Rhode Island had strong state-level interest-rate protections for many years, but they have been whittled down after the Marquette decision. The Empowering States' Rights to Protect Consumers Act would bolster Rhode Island's ability to protect its citizens from usurious loans.

The legislation is endorsed by the Capital Good Fund and Americans for Financial Reform.

"With seventeen years of experience offering affordable personal loans, we know that high-interest debt devastates working families in Rhode Island and beyond," said Capital Good Fund Founder and CEO Andy Posner. "The pandemic, inflation, and the current affordability crisis have made clear that consumers need both access to credit and strong protections against predatory actors. States like Rhode Island have taken steps to rein in abusive products, but loopholes remain. Senator Whitehouse's legislation would give states the tools they need to close these loopholes and ensure a fair marketplace for all, which is why we strongly support the Empowering States' Rights to Protect Consumer Act."

"This legislation paves the way for states to step up and protect people from sky-high credit card interest rates," said Tom Feltner, Associate Director of Consumer Policy at Americans for Financial Reform. "States have a critical consumer financial protection role to play that has only become more vital since the administration has attempted to shutter the Consumer Financial Protection Bureau, halt its efforts to bring down costs, and roll back its work to enforce critical financial protections." The bill text can be found here.