Banking Industry Collected $309 Billion as Congress Debated Rate Caps

While trade associations spent undisclosed sums lobbying Congress, credit card issuers extracted a combined $309 billion in interest and interchange fees in 2024 alone — and the full campaign...

In 2024, American credit card holders paid $160 billion in interest charges and $149 billion in interchange fees — a combined $309 billion extracted from a single consumer credit product, according to data compiled by Protect Borrowers and cited in CFPB-sourced analyses. That figure, calculated against a Federal Reserve benchmark borrowing rate of below 4.5 percent and an average credit card interest rate of 28.6 percent as reported by Forbes and cited in Senator Bernie Sanders's Senate press release, frames the essential arithmetic of the current congressional debate: a spread of approximately 24 percentage points between what banks borrow at and what they charge consumers on revolving balances that have now reached a record $1.17 trillion in aggregate, per the same Sanders press release.

The legislative response has been genuinely bipartisan in its sponsorship and genuinely unified in its industry opposition. Senator Sanders (I-VT) and Senator Josh Hawley (R-MO) co-sponsored the 10% Credit Card Interest Rate Cap Act, which would impose an immediate ceiling with a five-year sunset provision, according to Sanders's Senate press release and an American Bankers Association letter to Congress. Representative Alexandria Ocasio-Cortez (D-NY) has aligned publicly with the rate cap position. President Donald Trump publicly advocated for a temporary 10% cap, though PBS NewsHour reported that banks are 'balking' and no executive action has been confirmed. Senator Roger Marshall (R-KS) and Representative Lance Gooden (R-TX) separately sponsored the Credit Card Competition Act (S. 3623 / H.R. 7035), which would mandate routing competition in payment processing — a structurally distinct but economically related reform also opposed by the banking industry.

The industry's response is architecturally layered across at least four institutional types. The American Bankers Association issued a formal State Bankers Association Letter to Congress opposing the 10% cap as an amendment to the GENIUS Act stablecoin bill — the legislative vehicle Sanders and Hawley attempted to use for their amendment, per both the ABA letter and Sanders press release. The ABA also maintains BankPac, its federal political action committee, along with a 2026 electoral engagement program, a grassroots mobilization apparatus, and a State Association Alliance for coordinated state-level advocacy, according to ABA's own advocacy webpage. The Independent Community Bankers of America distributed a formal Capital Summit Lobby Card instructing member bankers attending congressional meetings to oppose both the rate cap proposals and the Credit Card Competition Act, characterizing rate caps as 'government price controls' that would cause 'reduced credit access, especially for lower- and middle-income borrowers,' per the ICBA Lobby Card itself. The Bank Policy Institute — whose members include large global banks — published a research note titled 'The Potential Adverse Consequences of a Credit Card Interest Rate Cap,' drawing on Federal Reserve Survey of Consumer Finances data to argue that borrowers whose rates 'marginally exceed the cap' risk losing access to credit, per the BPI research note.

The industry's primary consumer-facing argument rests on a historical analogy: when Congress capped debit card interchange fees through the Durbin Amendment to Dodd-Frank, banks eliminated debit card rewards programs. Banking lobbyists, as described collectively by PBS NewsHour, have argued the same dynamic would follow a credit card rate cap. But Protect Borrowers analyst Brian Shearer's published analysis notes that credit card late fees — frequently cited by industry as the central consumer cost concern — represent less than one-eighteenth of the combined $309 billion in interest and interchange revenue. Shearer's analysis also finds that credit card return on assets runs approximately six times higher than the return on assets for all banking activities combined, a margin that materially complicates the industry's claim that rate caps would force retrenchment rather than compress extraordinary profits.

The Columbia Law School analysis by Richard Briffault, 'Lobbying and Campaign Finance: Separate and Together,' provides the structural framework for understanding how these institutional mechanisms interact: lobbying and campaign finance are, in Briffault's formulation, 'two important forms of political activity that combine money and communication' that 'frequently interact and reinforce each other.' The banking industry does not deploy one mechanism or the other — the documented record shows simultaneous activation of registered lobbying, trade association advocacy, PAC infrastructure, commissioned research dissemination, and grassroots mobilization. Congress first explicitly regulated the intersection of lobbying and campaign finance in 2007 legislation, per Briffault's analysis, acknowledging the combined power of these parallel channels.

An existing regulatory precedent is also embedded in this debate without adequate public attention: federal credit unions are already statutorily capped at 18 percent interest on credit cards, according to a Vanderbilt Law School policy analysis. This cap has operated continuously and has not produced the credit access collapse that banking trade associations predict would follow a broader rate cap. The Vanderbilt analysis indicates a rate ceiling can function within a consumer credit market — a data point the BPI research note does not address.

What the public record does not yet show is equally significant. BankPac's total contribution figures, recipient legislators, and disbursement dates are not available in the source material reviewed — FEC records for the ABA's political action committee would close this gap. The ICBA's PAC contribution data is similarly absent. No individual lobbyist names, no registered lobbying firm names, and no specific dollar figures for banking industry lobbying expenditures on credit card rate cap legislation appear in Senate Lobbying Disclosure Act filings reviewed for this analysis. The Bank Policy Institute, organized as a 501(c)(6), has not disclosed member bank contribution levels to its operating budget in publicly reviewed materials — its Form 990 would reveal revenue sourcing and lobbying expenditures. For Senators Hawley and Marshall and Representative Gooden — all Republicans sponsoring legislation the banking industry formally opposes — their historical banking industry PAC receipts would reveal whether their current positions represent a genuine break from prior industry alignment or have always been consistent. And the outcome of the Sanders-Hawley amendment vote on the GENIUS Act — whether it was brought to a vote, tabled, or withdrawn — is not confirmed in reviewed source material. The instruments that would answer these questions are: FEC disbursement records for BankPac and the ICBA PAC, Senate Lobbying Disclosure Act filings for the 118th and 119th Congresses queried by issue area, BPI's Form 990 filings, and the Senate amendment vote record for the GENIUS Act. Until those records are reviewed in combination, the full money trail connecting $309 billion in annual credit card revenue to specific legislative outcomes remains incomplete.