The Sanders-Hawley bill would cap the interest rates immediately and the legislation would remain in effect for five years, the senators said in a Tuesday press release.
The senators said in the release that the average credit card interest rate is 28.6% at a time when banks can borrow money from the Federal Reserve at less than 4.5%; Americans hold a record $1.17 trillion in credit card debt; and the delinquency rate of credit cards issued by commercial banks is at the highest rate since 2011.
"When large financial institutions charge over 25% interest on credit cards, they are not engaged in the business of making credit available. They are engaged in extortion and loan sharking," Sanders said in the release.
Hawley said in the release: "Capping credit card interest rates at 10%, just like President Trump campaigned on, is a simple way to provide meaningful relief to working people."
"While working Americans catch up, we're going to put a temporary cap on credit card interest rates," he said, per the report. "We can't let them make 25 and 30 percent."
Responding to the newly introduced legislation from Sanders and Hawley, Consumer Bankers Association President and CEO Lindsey Johnson said in a statement released Tuesday that price-setting is "political pandering" that has proven to harm Americans.
"Research clearly shows that when politicians, rather than the free market, dictate prices, consumers ultimately pay the price through limited choices outside the well-regulated banking system," Johnson said. "For example, one in nine Missourians already uses payday loans, almost double the national average. Those consumers pay annual interest rates of more than 300 percent because of their lack of access to bank credit."