Charles Payne said a new proposal from Bernie Sanders and Alexandria Ocasio-Cortez to put a federal cap on credit card interest rates has little chance of success.
Democratic Socialist Senator and 2020 Democratic candidate for the presidency Bernie Sanders (D-VT) and Representative Alexandria Ocasio-Cortez (D-NY) introduced legislation on Thursday to cap credit card interest rates at 15 percent.
Under the proposed legislation, states could establish their own limits.
In an interview on “America’s Newsroom” Payne -- host of “Making Money With Charles Payne” on the Fox Business Channel -- explained, “This is an industry they’re going to say that did a $113 billion dollars last year. That poorer Americans who have credit cards paid 25 percent interest. Richer Americans pay 17 percent interest. Inherently they’re going to say, it’s obviously unfair.”
Sanders told the Washington Post that the 15 percent cap would be the same as what Congress imposed on credit unions in 1980.
He has historically been a staunch critic of Wall Street throughout his career and Ocasio-Cortez has advocated for increased regulation of Wall Street institutions. The pair appeared together on the campaign trail last year and going after Wall Street is a part of Sanders’ pitch to the American people.
Ocasio-Cortez will introduce the House version of the bill and try to rally her fellow Democrats.
However, the proposal is sure to meet resistance from banks. According to S&P Global Market Intelligence, the industry brought in $113 billion in interest and fees from credit cards last year.
It also has little chance of passing in the Senate, where Republicans hold the majority.
Payne added, “In fact, Bernie Sanders’s Communications Director said Jamie Dimon and Lloyd Blankfein are going to be really, really…they’re really going to hate this bill and we welcome that hatred big time.”
According to Creditcards.com, which has been tracking the data since 2007, interest rates have recently been reaching record levels as the Fed raised key interest rates and the industry prepares for the next big recession.
"I am sure it will be criticized," Sanders told the Washington Post. "I have a radical idea, maybe Congress should stand up for ordinary people."