The Credit Advantage America Already Has

 As policymakers search for ways to deliver meaningful relief to American consumers, they will look at new initiatives, but not entirely. Part of the exercise surely will involve identifying efforts that already work in keeping American families afloat. That’s certainly the case with institutions that work to fight against the rising cost of credit in communities across the country.

For decades, credit unions have quietly done what policymakers across administrations have struggled to engineer: provide affordable credit at scale, without gimmicks and without distorting markets. They are member-owned, not-for-profit financial cooperatives, designed explicitly to put consumers first – a lot of consumers. Credit unions serve 145 million Americans. 

Unlike large banks and fintech lenders that must price for maximum return, credit unions price for service and sustainability. Credit unions operate under consumer-first charters with built-in limits. Federally chartered credit unions, by law, cap credit card interest rates at 18 percent, and many offer options well below that, with rates for classic cards averaging near 12 percent, according to the National Credit Union Administration.

At a time when average credit card rates elsewhere remain near historic highs, credit unions represent a proven, market-based model for affordability.

They have a decades-long track record that makes the case.

When inflation surged and interest rates climbed, credit unions did not rush to reprice credit upward to protect their profit margins. Instead, many absorbed the pressure, extended terms, and kept credit flowing especially to working families, military members, and consumers with thin or recovering credit. In doing so, they helped keep millions of Americans out of far more expensive alternatives, from payday loans to unregulated installment products.

The current policy conversation reflects a genuine desire to help consumers manage costs. But history shows that broad, one-size-fits-all interventions, particularly interest rate caps, often carry unintended consequences. While well-intentioned, they can restrict access to credit, particularly for the households that need it most.

There is another path. Rather than attempting to manufacture affordability through mandates, policymakers could expand and strengthen access to the institutions already delivering it. Credit unions already cap rates, already return value to consumers, and already operate without taxpayer risk. The question isn’t whether affordable credit is possible, it’s how quickly we can help more Americans access it.

An effective approach would focus on removing barriers that limit credit unions’ ability to grow, modernize, and serve underserved communities. Expanding access to these member-owned institutions would do more to promote affordability than any new federal credit product ever could.

Credit unions don’t need to be reinvented. They need to be recognized and sustained.

Affordability in America doesn’t come from slogans or mandates. It comes from mission-driven institutions that compete, innovate, and serve. For more than a century, credit unions have done that and kept credit costs low. 

As the President and Congress look for durable, market-based solutions to affordability and rising credit costs, the smartest move may be to look at maintaining credit unions, which already work.

Scott Simpson is President and CEO of America’s Credit Unions.

https://www.realclearpolicy.com/articles/2026/01/22/the_credit_advantage_america_already_has_1160286.html