It’s only been a few days since President Donald Trump called on lawmakers to cap credit card interest rates at 10%, and Wall Street is already in panic mode. 

At ‌surface level, reducing interest rates sounds great from a consumer’s perspective. But dig a little deeper, and several experts believe this policy will harm markets and make finance less accessible to the general public. That’s why big-time investors, banks, and credit card companies are all lining up in opposition to Trump’s proposal.

But one person who’s not opposed to capping interest rates is SoFi (SOFI) CEO Anthony Noto.

Noto isn’t arguing against the idea that an interest rate cap would be bad for the industry. In fact, he knows for a fact that an artificial rate reduction would send card acceptance rates plummeting. That’s exactly what he wants to happen.

As the head of a commercial lender, Noto and his company could win big if Trump gets his way. Let’s unpack the reasons why and, more importantly, how all of this is going to affect everyday borrowers.

How Would Interest Rate Caps Create a Credit Gap?

Credit card interest has been climbing steadily over the last three decades. The average interest rate was just under 21% at the end of 2025, and it goes without saying that these rates pose a significant concern for many cash-strapped families. 

That’s why Trump has joined the likes of Sen. Bernie Sanders in his crusade to halve those interest rates and give borrowers a bit of temporary breathing room. If you’re sitting on top of a mountain’s worth of credit card debt, this would be a huge help. But for everybody else, the move is incredibly disruptive.

Credit card interest rates are priced in using loads of variables including the risk of default, rewards programs, and the cost of capital. According to Anthony Noto, “credit card issuers simply won't be able to sustain profitability at a 10% rate cap.” As a result, credit providers will need to stop lending to high-risk borrowers and raise their fees to compensate. That’ll push millions of customers away in the process.

Unfortunately, it’ll also place a lot of families between a rock and a hard place. Credit will no longer be accessible, and they’ll still need to obtain cash from somewhere to consolidate debt and cover major life expenses.

That’s where personal loans step in.

Unlike credit cards with variable rates tied to outstanding balances, personal loans offer fixed-term, fixed-payment solutions for borrowers. They don’t really rely on APR to make money, which means loan providers can price risk and tailor products in a way that credit companies couldn't manage under a 10% cap.

On the one hand, this push could be better for consumers. It gives them more control and predictability around repayment timelines, and interest rates are ordinarily lower to begin with. That means less debt in the long term.

But to succeed in the personal loans space, providers need strong underwriting and risk management regimes.

Those are two boxes that SoFi ticks.

Noto’s business is well-positioned to capitalize on this potential credit gap and meet the new demand for loans. SoFi’s personal loans business has been scaling steadily over the last few years, with origination reaching an all-time high in Q3 of 2025. Meanwhile, its expansion of third-party loan packaging and distribution through partnerships has dramatically widened the bank’s market reach.

Long story short: Personal loans are going to skyrocket if Trump gets his way, and SoFi’s business definitely comes out on top. That's why Noto is sitting on the sidelines cheering about the prospect of credit disruption.

What Does All This Mean for Consumers?

It might be interesting to watch billionaires debate policy and how it’ll affect their shareholders, but it’s a lot more important to look at how this actually affects real people with normal-sized wallets.

So, here’s the bottom line: If credit card rates do get capped at 10%, traditional credit card companies will almost certainly withdraw cards and scale back offers. Higher interest margins generally fund rewards and perks, which means that everyday spending won’t get you much.

If your credit history is thin, you’re going to find it incredibly difficult to get approved for anything half-decent.

And if you’re carrying short existing balances, structured personal loans are going to look like a pretty attractive way to consolidate debt or meet regular budgeting needs. Average lending rates are already about 10% cheaper than credit, and challenger banks like SoFi are offering less than that.

If credit providers are forced to drop their rates to 10%, you can bet lenders will follow suit to appear more competitive. That’s good news for consumers who are currently juggling big balances or high card rates — but only if you understand the terms and risks that go hand in hand with personal loans.

Will any of this actually happen? It’s too early to tell.

But from an investor’s point of view, this isn’t just noise. Interest rate caps don’t simply change prices. They change behavior, and that’s what Anthony Noto is hoping for.

More news from Barchart

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