In response to ongoing concerns about affordability, the Trump administration is revisiting several consumer finance proposals that were prominent during President Donald J. Trump’s 2024 campaign. These include options such as a 50-year mortgage, tariff dividend checks, an executive order to limit institutional investment in single-family homes, increased federal purchases of mortgage loans, and various credit price controls.
President Trump has recently indicated support for two specific credit price control measures: a temporary cap on credit card interest rates at 10 percent for one year and backing the Credit Card Competition Act. The latter is a legislative proposal that could introduce indirect price controls on credit card processing fees.
According to critics, basic economic principles suggest that price caps can lead to shortages. If implemented, these measures could restrict access to credit for millions of Americans, particularly those considered higher risk. Additionally, financial institutions might increase fees in other areas to offset potential losses from serving only select customers.
Historical examples highlight the potential consequences of such policies. In 1971, President Richard M. Nixon imposed broad wage and price freezes across the country in an effort to combat inflation linked to wartime spending and expansive government programs from previous administrations. “Initially very popular, the plan helped him carry 49 of 50 states to win reelection.” However, after the controls were lifted, inflation had doubled and other significant economic issues emerged. “The ultimate effect was predictably disastrous, fueling the fires of double-digit inflation, decreased productivity and innovation, empty supermarket shelves, and other major economic issues.” The Nixon-era controls are now often cited as a major policy failure.
A similar approach was taken by President Jimmy Carter in March 1980 under the Credit Control Act of 1969 amid soaring inflation rates. Through measures enacted by the Federal Reserve—including limits on credit card usage and restrictions on installment loans—Carter aimed to curb consumer spending and reduce inflationary pressure. However, “the effects were so rapid and intense that the caps were abandoned just four months later.” Instead of easing inflation gradually as intended, these actions contributed to reduced access to credit and triggered a recession.
More recently, Congress passed debit interchange fee caps through the Durbin Amendment as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act following the 2008 financial crisis. While designed with consumer savings in mind—assuming retailers would pass along lower costs—studies have shown mixed results: some retailers lowered prices while others raised them or made no changes at all. Furthermore, many consumers lost access to free or low-fee checking accounts due to changes brought by this regulation.
“Federal price controls have been proposed in the United States on several occasions, often to advance political priorities,” notes analysis from R Street Institute staff. “While they tend to have broad appeal before implementation, long-term results show economically and politically disastrous downstream effects.”
As discussions continue around new forms of credit price controls under consideration by current policymakers, historical outcomes remain central in debates over their potential impact.
