Powering the American Economy

Our Policy Approach

The Coalition for Financial Opportunity supports policies that:

  • Protect access to fair, reliable credit including entry-level and subprime credit products that help consumers and small businesses build financial stability.
  • Maintain risk-based pricing models that allow lenders to responsibly serve borrowers while maintaining the safety and soundness of the financial system. 
  • Promote data-driven policymaking that reflects America’s pocketbook issues and market dynamics.
  • Advance financial literacy and education initiatives that equip people and small businesses with the knowledge and tools to make informed borrowing decisions and manage credit responsibly

We oppose policies that create obstacles to credit, particularly for borrowers with limited credit histories or lower credit scores, and that would push consumers toward higher-cost, predatory financial products such as payday or title loans.

Our Commitment

The Coalition for Financial Opportunity brings together stakeholders from across the consumer and business ecosystem to provide research, data, and real-world insights to policymakers and their constituents. Our goal is to ensure that legislative and regulatory decisions strengthen, not weaken, access to fair and reliable credit. Protecting access to credit is not simply a financial issue; it is an economic opportunity issue. When families and small businesses have the tools they need to manage risk and invest in their futures, communities grow stronger and the economy becomes more resilient.

Capping Credit Card Interest Rates

Recently, politicians in Washington, DC on both the Left and the Right have begun discussing a legislative proposal to cap credit card interest rates at 10%. While such a proposal sounds like a potential win for American consumers, a deeper examination of the data reveals a problematic policy with hidden costs that would disproportionately be borne by working families and small businesses.

Under our current system, lenders extend credit by balancing risk and cost. Rates are set to reflect those risks and costs of doing business. Because credit cards are essentially an “unsecured” loan – meaning there is no collateral like a home or a piece of property put up by a borrower to back the loan – the interest rate must cover the risk of default. Borrowers with stronger credit typically receive lower rates, while those with limited credit histories or lower credit scores pay higher rates that reflect the greater lending risk. This approach allows lending institutions to serve a broad range of consumers while remaining financially sustainable.

Imposing caps on credit card interest rates would undermine this model. If lenders are unable to price for risk, they are likely to reduce or eliminate credit offerings for higher-risk borrowers and those with less than perfect credit, including entry-level and secured credit products.

Independent studies show that the negative impacts of a credit card interest rate cap would be significant:

  • One study found that imposing an interest rate cap would restrict access to credit for more than 14 million people.
  • A 15% interest rate cap would risk access to credit for about 95% of people with credit scores lower than 700.1

Left without access to traditional banking options, many of these consumers would be forced to seek financing from unregulated sources that charge extreme rates, with some predatory lenders charging up to 400% in interest rates2, and provide little consumer protection, which would harm the very people it intends to help.

Additionally, economists from across the political spectrum are warning about the serious impacts that imposing credit card rate caps would have:

Learn more:

  1. Unleash Prosperity: Why Interest Rate Caps Are Harmful to Consumers
  2. Progressive Policy Institute: Credit: How Rate Caps Undermine Access for Working Americans
PAID FOR BY COALITION FOR FINANCIAL OPPORTUNITY