Bernie Sanders and Alexandria Ocasio-Cortez have proposed legislation to cap interest rates on credit cards and other consumer loans at 15 per cent in an effort to help consumers grappling with growing credit card debt.

The proposal by the Vermont senator and New York congresswoman also called for the US Postal Service to provide basic banking services as a way to provide new, affordable competition to traditional banks.

“There is no reason a person should pay more than 15% interest in the United States,” Ms Ocasio-Cortez tweeted. “It’s a debt trap for working people + it has to end.”

While Mr Sanders is running for the Democratic Party’s nomination for president, Ms Ocasio-Cortez has emerged as one of the most high-profile Democrats in Congress since winning her seat in 2018.

The bill would place significant restrictions on short-term loans, such as payday loans, that can rely on significantly higher interest rates, as well as cut into profits from traditional banks. The average interest rate on credit cards is currently 17.73 per cent, according to an industry survey by CreditCards.com - the highest level since the site began tracking rates in 2007.

Alexandria Ocasio-Cortez - the Democratic congresswoman in pictures Show all 15 1 /15 Alexandria Ocasio-Cortez - the Democratic congresswoman in pictures Alexandria Ocasio-Cortez - the Democratic congresswoman in pictures Alexandria Ocasio-Cortez greets fellow lawmakers ahead of the State of the Union address Getty Alexandria Ocasio-Cortez - the Democratic congresswoman in pictures Alexandria Ocasio-Cortez participates in an event with Democratic members of Congress EPA Alexandria Ocasio-Cortez - the Democratic congresswoman in pictures The Democrat senator speaks during a news conference at the U.S. Capitol January 30, 2019 Getty Alexandria Ocasio-Cortez - the Democratic congresswoman in pictures Alexandria Ocasio-Cortez and fellow Democrat Rashida Tlaib AP Alexandria Ocasio-Cortez - the Democratic congresswoman in pictures Alexandria Ocasio-Cortez at the Senate chamber to watch two votes on January 24, 2019 Getty Alexandria Ocasio-Cortez - the Democratic congresswoman in pictures Alexandria Ocasio-Cortez arrives with Chellie Pingree at a House Democratic Caucus meeting Getty Alexandria Ocasio-Cortez - the Democratic congresswoman in pictures Ocasio-Cortez during Donald Trump's State of the Union address Reuters Alexandria Ocasio-Cortez - the Democratic congresswoman in pictures New York State Assembly member Catalina Cruz with Ocasio-Cortez AFP/Getty Alexandria Ocasio-Cortez - the Democratic congresswoman in pictures Nydia Velazquez talks with Alexandria Ocasio-Cortez Reuters Alexandria Ocasio-Cortez - the Democratic congresswoman in pictures Ocasio-Cortez casts her vote for Nancy Pelosi as Speaker of the House EPA Alexandria Ocasio-Cortez - the Democratic congresswoman in pictures Alexandria Ocasio-Cortez poses with a campaign worker during a whistle stop in the Queens borough of New York Reuters Alexandria Ocasio-Cortez - the Democratic congresswoman in pictures Ocasio-Cortez outside the US Capitol AFP/Getty Alexandria Ocasio-Cortez - the Democratic congresswoman in pictures Ocasio-Cortez after casting her ballot in the 2018 midterm general election at a polling site in New York EPA Alexandria Ocasio-Cortez - the Democratic congresswoman in pictures Alexandria Ocasio-Cortez looks on during a march organised by the Women's March Alliance in Manhattan Reuters Alexandria Ocasio-Cortez - the Democratic congresswoman in pictures Ocasio Cortez looks on at the Capitol in Washington, DC, on January 16, 2019 AFP/Getty

The bill would allow the Federal Reserve to temporarily permit higher borrowing rates if needed to help keep institutions afloat, but for no more than 18 months. It also would not prevent states from establishing lower maximum interest rates.

The measure marks the first time that Ms Ocasio-Cortez has helped author a bill taking aim at the financial industry. The freshman Democrat from New York has a seat on the House Financial Services Committee.

The bill is unlikely to become law with Republicans in control of the Senate and the White House, however, and expected intense opposition from the financial services industry. But it could present a potent campaign issue to Democrats jockeying for support in a crowded 2020 presidential nominating field.

With over 20 candidates competing for the party’s nomination, many Democrats have seized on a populist, anti-Wall Street message that resonates with voters. Several high-profile candidates, like Senators Kamala Harris of California and Cory Booker of New Jersey, have pushed for policies that would curb the financial industry and provide better support to struggling borrowers.

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Senator Elizabeth Warren, who is also seeking the Democratic nomination, largely built her political reputation on taking on Wall Street after the financial crisis and helping to build the Consumer Financial Protection Bureau.