Trump calls for one year cap on credit card interest rates at 10%

[BumRushDaShow]

25. What has happened since the Raygun '80s, was banking deregulation

I.e., a number of banks that actually host/issue those credit cards, will domicile/charter their card entities in states with no cap or a high cap. The most common state is South Dakota, where you will see this -

Fact brief: Is South Dakota one of the friendliest states for credit card companies?

Yes.

South Dakota landed several major credit card companies after 1980 because of the state’s lack of laws restricting interest rates.

In the 1970s, credit card companies were losing money with every swipe because most states had laws that capped interest rates.

The lack of a usury law in South Dakota combined with a Supreme Court ruling that said companies could use the state’s laws where the company was headquartered led to a financial boom. Even if a card was used in another state, South Dakota laws governed interest rates.

(snip)

The linked article lists 3 big issuers - Wells Fargo, Citi and First PREMIER Bank - who established their cards there (and many small orgs with cards in their own names, are actually issued by banks like those, through an agreement).

The unanimous SCOTUS ruling that established this -

Marquette Nat. Bank v. First of Omaha Svc. Corp., 439 U.S. 299 (1978)

(snip)

MR. JUSTICE BRENNAN delivered the opinion of the Court.

The question for decision is whether the National Bank Act, Rev.Stat. § 5197, as amended, 12 U.S. C § 5, [Footnote 1] authorizes a national bank based in one State to charge its out-of-state credit-card customers an interest rate on unpaid balances allowed by its home State, when that rate is greater than that permitted by the State of the bank's nonresident customers. The Minnesota Supreme Court held that the bank is allowed by § 85 to charge the higher rate. 262 N.W.2d 358 (1977). We affirm.

(snip)

So this means a card holder needs to REALLY research where their card issuer's credit card unit is domiciled, otherwise years after some low "introductory interest rate", that rate can suddenly change to the max rate of the state where the card is issued from, not from the state where the holder resides.