Thom Tillis Questions Scott Bessent on Proposed 10% Credit Card Interest Rate Cap

Concerns Over Proposed Credit Card Interest Rate Cap

• 📌 Senator Thom Tillis questioned Treasury Secretary Scott Bessent regarding President Trump's proposed 10% cap on credit card interest rates.
• 💡 Tillis framed the discussion by referencing a conversation with Senator Elizabeth Warren, suggesting she had convinced President Trump on the cap, while Tillis stated his intention to oppose it.

Potential Market Impacts

• 📊 Tillis inquired about the potential impact of such a cap on the asset-backed securities market and credit card issuers.
• ⚠️ Bessent indicated that the Treasury is still examining the effects, noting that the impact could depend on the duration of the cap, with the President having proposed a one-year period.

Credit Card Issuer Competition and Rewards

• 💳 Bessent explained that credit card companies have shifted competition from APRs to rewards programs, which primarily benefit higher-income individuals.
• 💰 He suggested that credit card companies could maintain profitability by focusing more on competing on rates rather than rewards, implying that the current rewards system has significant "frothiness."