BRANTFORD, ONT.—New Democrat Leader Jack Layton wants to cap credit card rates to five percentage points above prime and believes this can be done without banks passing the cost onto consumers another way.

“Canadians deserve to have access to credit at a fair rate,” Layton said Tuesday outside a family home in Brantford, Ont., where the windows were decked out with big orange circles announcing the gist of the plan.

The first policy announcement from the NDP campaign would allow the federal government to regulate credit card interest rates so that they could not be any higher than five points above the prime rate, which the Bank of Canada has currently set at three per cent.

That would mean credit card companies could not charge more than eight per cent interest on the monthly bill — the same idea the NDP put forward on the 2008 campaign trail and then introduced in a private member’s bill last year.

That is a deep cut from current interest rates, and the NDP claims the rate cap would save the average card holder with an outstanding balance more than $740 a year and has set up an application on the campaign website so voters can calculate how much the promise would help them out.

It is unclear how the plan could or would prevent the banks from simply passing on the lost profits to consumers some other way.

“The banks are very creative. They won’t have a big problem to find money,” Layton said when pressed on this, deflecting every question about how banks would recoup the lost profits by playing up the contrast between rich banks and struggling families.

“Right now they’re just simply gouging and they’re going to have to figure out a way to make money without being so unfair,” said Layton, who claimed his proposed regulations would not cost taxpayers any extra money to monitor and enforce.

That may have gone over well with the crowd standing outside in the sunny cold on a suburban residential street, but it is unlikely to be much of interest to the banks, and Layton admits they have not responded positively when he has asked them.

“They have refused to take action along the lines that we recommended and that’s why we need to have legislation,” said Layton, whose party plans to focus on affordability issues for middle-class families and seniors in this campaign.

The Conservative government introduced new credit card and debit regulations last April involving a voluntary code of conduct designed to improve financial literacy to make the industry more transparent, as well as a mandated three-week interest-free grace period on all new transactions for customers who pay off their balance in time.

The NDP plan announced Tuesday would make that code of conduct for credit card companies dealing with small businesses mandatory and would also give financial regulators new powers to forbid “excessive” credit card fees.