ICYMI: AFFM Advisors Senator Pat Toomey and Chairman Kevin Brady Discuss the Harms of Price Controls in FOX News Digital Opinion

“Rate caps would undermine market function and competition and return us to a badly failed policy of price controls.”

In case you missed it, former U.S. Senator Pat Toomey and U.S. House Ways and Means Committee Chairman Kevin Brady argue in a FOX News Digital op-ed that government-imposed price controls would produce serious unintended consequences in light of President Trump’s recent proposal to cap credit card interest rates at 10 percent. They warn that such caps would restrict credit availability and disproportionately harm hardworking Americans, underscoring the need for Congress to uphold free market principles and allow competitive markets — not federal mandates — to preserve access to credit for Americans.

They both note that, historically, “When governments mandate an artificially low price for a product or service in a competitive market, the result is always the same: reduced supply.” These lessons of the past show that “price controls on credit cards would have a similar effect. They would reduce the availability of credit.” 

They note that “Banks would either have to make up for the lost revenue elsewhere with higher fees and charges, or discontinue issuing credit cards to high-risk and low-income customers.” Americans who lose access to credit cards would be “forced to turn to more expensive, riskier alternatives, such as loan sharks and payday lenders.”

Toomey and Brady agree there is a need to address affordability; however, they argue that:

• A credit card rate caps is government interference: Competition within the credit card space is intense and already provides many options to consumers, and imposing price controls would distort market signals and undermine the system’s ability to allocate credit efficiently.
• Lawmakers should not repeat past mistakes: History demonstrates that price controls, regardless of their intentions, often produce unintended consequences that ultimately leave consumers worse off by reducing supply and limiting choices.
• Americans rely on a hands-off system of credit to build their futures: The credit card marketplace has long functioned as a flexible tool that facilitates everyday purchases and financial mobility, and rate caps would disrupt this natural stability.

Brady and Toomey conclude their piece calling for Congress to “let the marketplace continue to offer consumers, working-class families and Main Street businesses, of all incomes, access to the credit they need.”

Read Sen. Toomey’s and Chairman Brady’s full piece in FOX News Digital HERE.