Last year, banks quickly raised interest rates to record levels and added new monthly fees on credit cards when a Consumer Financial Protection Bureau rule threatened a key revenue source for the industry.

Now, they’re far more reluctant to reverse those steps, even after bank trade groups succeeded in killing the CFPB rule in federal court last month.

Synchrony and Bread Financial, two of the biggest players in the business of issuing branded credit cards for the likes of Amazon, Lowe’s and Wayfair, are keeping the higher rates in place, executives said in recent conference calls.

“We feel pretty comfortable that the rule has been vacated,” Synchrony CEO Brian Doubles said on April 22. “With that said, we don’t currently have plans to roll anything back in terms of the changes that we made.”

His counterpart at Bread, CEO Ralph Andretta, echoed that sentiment, “At this point, we’re not intending to roll back those changes, and we’ve talked to the partners about that.”

The CEOs celebrated the end of a proposed CFPB regulation that was meant to limit what Americans would pay in credit card late fees, an effort that the industry called a misguided and unlawful example of regulatory overreach. Under previous Director Rohit Chopra, the CFPB estimated that its rule would save families $10 billion annually. Instead, it inadvertently saddled borrowers with higher rates and fees for receiving paper statements as credit card companies sought to offset the expected revenue hit.

Retail cards hit a record high average interest rate of 30.5% last year, according to a Bankrate survey, and rates have stayed close to those levels this year.

“The companies have made a windfall,” said David Silberman, a veteran banking attorney who lectures at Yale Law School. “They didn’t think they needed this revenue before except for [the CFPB rule], and they’re now keeping it, which is coming directly out of the consumer’s pocket.”

Synchrony and Bread both easily topped expectations for first-quarter profit, and analysts covering the companies have raised estimates for what they will earn this year, despite concerns about a looming U.S. economic slowdown.

There were more than 160 million open retail card accounts last year, the CFPB said in a report from December that highlighted risks to users of the high-interest cards.

More than half of the 100 biggest U.S. retailers offer store cards, and brands including Nordstrom and Macy’s relied on them to generate roughly 8% of gross profits in recent years, the CFPB said.

Banks may be taking advantage of the fact that some users of retail cards don’t have the credit profiles to qualify for general-purpose cards from JPMorgan Chase or American Express, for example, said senior Bankrate analyst Ted Rossman.

Nearly half of all retail card applications are submitted by people with subprime or no credit scores, and the card companies behind them approve applications at a higher rate than for general-purpose cards, the CFPB said.

“Companies like Bread or Synchrony, they rely a lot more on people who carry balances or who pay late fees,” Rossman said.

Rates on retail cards have fallen by less than 1% on average since hitting their 2024 peak, and they are typically about 10 percentage points higher than the rates for general-purpose cards, Rossman said.

That means it’s unlikely that other large players in the retail card sector, including Citigroup and Barclays, have rolled back their rate increases in the wake of the CFPB rule’s demise. The most recent published APR on the Macy’s card, issued by Citigroup, is 33.49%, for instance.

Citigroup and Barclays representatives declined to comment for this article.

Alaina Fingal, a New Orleans-based financial coach, said she often advises people who’ve been trapped in a debt spiral from using retail credit cards. Some have to take on side gigs, like driving for Uber Eats, to work down the balances, she said.

“They do not understand the terms, and there are a lot of promotional offers that may have deferred interest clauses that are in there,” Fingal said. “It’s extremely predatory.”

The Federal Reserve heads into its closely watched policy decision Wednesday with a strong incentive to do absolutely nothing.

Faced with unresolved questions over President Donald Trump’s tariffs and an economy that is signaling both significant strengths and weaknesses, central bank policymakers can do little for now except sit and wait as events unfold.

“It’s going to be awkward at this meeting. The Fed doesn’t have a forecast to convey anything about the next couple meetings,” said Vincent Reinhart, a former long-time Fed official and now chief economist at BNY Investments. “The Fed’s got to wait for two things: It’s to see that the policy actually goes into place … But then, when it’s demonstrated, it’s got to see how inflation expectations react. So that’s why the Fed’s got to delay, then go slow.”

Indeed, futures market pricing is implying almost no chance of an interest rate cut at this week’s meeting, and only about a 1-in-3 probability of a move at the June 17-18 session, according to the CME Group’s FedWatch gauge.

Market expectations have shifted over the past week in response both to mixed economic signals as well as signs that President Donald Trump is getting at least a bit less aggressive in his tariff approach. The White House has signaled that several trade deals are nearing completion, though none have been announced yet.

Reinhart said his firm has two cuts plugged in for this year, a bit tighter of a path than the market expectations for three reductions starting in July. A week ago, markets were betting on as many as four cuts, starting in June.

Fed Chair Jerome Powell will be left at his post-meeting news conference to explain the thinking from him and his colleagues on where they see policy heading.

“The other unsatisfying part is they don’t know what they’re going to do in June,” Reinhart said. “So he’s going to have to say everything’s on the table. He always says it, but this time, he’s going to have to mean it.”

Powell, though, is sure to face questioning about how policymakers see the recent barrage of data, which has painted a picture of economy loaded with pessimism from consumers and business executives that has yet to feed into hard numbers such as spending and employment.

While gross domestic product fell at a 0.3% annualized rate in the first quarter, it was largely the product of a surge in imports ahead of Trump’s April 2 tariff announcement. The April nonfarm payrolls report showed that hiring continued at a solid pace, with the economy adding a better-than-expected 177,000 jobs for the month.

At the same time, manufacturing and service sector surveys show deep concern about inflation and supply impacts from tariffs. Also, consumer optimism is at multi-year lows while inflation expectations are at multi-decade highs.

It all adds up to a tightrope for Powell and Co. to walk at least through the June meeting.

One wild card in the equation: Trump, as he did during his first term, has been urging the Fed to cut rates as inflation edges closer to the central bank’s 2% objective.

However, Reinhart, the BNY economist, does not see the Fed bending to Trump’s will nor breaking ranks despite public statements from some members showing division on policy.

“The White House has done Jay Powell a favor in keeping his committee together. Because generally, when a family is criticized from from the outside, it’s less willing to criticize each other,” Reinhart said. “Do you criticize Jay Powell now and line yourself up the president? Probably not, if you worked your whole life in the Federal Reserve system.”