SEOUL, South Korea (AP) — North Korea's military accused South Korea of flying drones across the border between the nations this week, warning Saturday that South Korea will face consequences for its “unpardonable hysteria.”
South Korea quickly denied the accusation. But the development is likely to further dim prospects for efforts by South Korea's liberal government to restore ties with North Korea.
North Korean forces used special electronic warfare assets on Sunday to bring down a South Korean drone flying over North Korea's border town. The drone was equipped with two cameras that filmed unspecified areas, the General Staff of the North's Korean People’s Army said in a statement carried by state media.
South Korea infiltrated another drone into North Korean airspace on Sept. 27 before it was forced to crash following electronic strikes by North Korea, the statement said, adding that authorities found the drone also contained video data on major objects in North Korea.
“We strongly denounce the hooligans’ serial outrageous encroachment upon our sovereignty and undisguised provocative acts against us,” the North Korean statement said. “The ROK military warmongers will be surely forced to pay a dear price for their unpardonable hysteria.”
The ROK is the abbreviated form of the Republic of Korea, South Korea's official name.
South Korea's Defense Ministry said it did not operate drones during the times specified by North Korea and doesn't even posses the types of drones that North Korea claimed were used.
Senior ministry official Kim Hong-Cheol said in a statement that authorities will investigate whether civilians flew the drones found in North Korea. He said South Korea has no intentions of provoking North Korea and will continue its efforts to build trust between the Koreas.
Since taking office in June, South Korean President Lee Jae Myung has pushed hard to reopen talks with North Korea and reconcile the rivals. But North Korea has steadfastly rebuffed Lee's overtures.
Lee said Wednesday he asked Chinese President Xi Jinping to serve as a mediator to ease animosities between the two Koreas during their recent summit, and Xi called for patience.
North Korea has shunned talks with South Korea and the United States since leader Kim Jong Un’s high-stakes nuclear diplomacy with U.S. President Donald Trump fell apart in 2019 due to wrangling over U.S.-led sanctions. North Korea has since focused on building more powerful nuclear weapons and declared a hostile “two-state” system on the Korean Peninsula to terminate relations with South Korea.
Drone flights are a source of animosity between the two Koreas, with the rivals accusing each other of flying drones into their respective territories in recent years.
North Korea accused South Korea in October 2024 of flying drones over its capital, Pyongyang, to drop propaganda leaflets three times. South Korea’s military said it couldn’t confirm whether the North’s claim was true.
Tensions rose sharply at the time as North Korea threatened to respond with force, but neither side took any major action and tensions gradually subsided.
South Korea also has accused North Korea of occasionally flying drones over South Korea. In December 2022, South Korea announced it fired warning shots, scrambled fighter jets and flew surveillance drones over North Korea in response to what it called North Korea’s first drone flights across the border in five years.
North Korea's Kaepoong village is seen from Ganghwa, South Korea, near the border with North Korea, Saturday, Jan. 10, 2026. (Im Sun-suk/Yonhap via AP)
North Korea's Kaepoong village is seen from Ganghwa, South Korea, near the border with North Korea, Saturday, Jan. 10, 2026. (Im Sun-suk/Yonhap via AP)
NEW YORK (AP) — Reviving a campaign pledge, President Donald Trump wants a one-year, 10% cap on credit card interest rates, a move that could save Americans tens of billions of dollars but drew immediate opposition from an industry that has been in his corner.
Trump was not clear in his social media post Friday night whether a cap might take effect through executive action or legislation, though one Republican senator said he had spoken with the president and would work on a bill with his “full support.” Trump said he hoped it would be in place Jan. 20, one year after he took office.
Strong opposition is certain from Wall Street in addition to the credit card companies, which donated heavily to his 2024 campaign and have supported Trump's second-term agenda. Banks are making the argument that such a plan would most hurt poor people, at a time of economic concern, by curtailing or eliminating credit lines, driving them to high-cost alternatives like payday loans or pawnshops.
“We will no longer let the American Public be ripped off by Credit Card Companies that are charging Interest Rates of 20 to 30%,” Trump wrote on his Truth Social platform.
Researchers who studied Trump’s campaign pledge after it was first announced found that Americans would save roughly $100 billion in interest a year if credit card rates were capped at 10%. The same researchers found that while the credit card industry would take a major hit, it would still be profitable, although credit card rewards and other perks might be scaled back.
About 195 million people in the United States had credit cards in 2024 and were assessed $160 billion in interest charges, the Consumer Financial Protection Bureau says. Americans are now carrying more credit card debt than ever, to the tune of about $1.23 trillion, according to figures from the New York Federal Reserve for the third quarter last year.
Further, Americans are paying, on average, between 19.65% and 21.5% in interest on credit cards according to the Federal Reserve and other industry tracking sources. That has come down in the past year as the central bank lowered benchmark rates, but is near the highs since federal regulators started tracking credit card rates in the mid-1990s. That’s significantly higher than a decade ago, when the average credit card interest rate was roughly 12%.
The Republican administration has proved particularly friendly until now to the credit card industry.
Capital One got little resistance from the White House when it finalized its purchase and merger with Discover Financial in early 2025, a deal that created the nation’s largest credit card company. The Consumer Financial Protection Bureau, which is largely tasked with going after credit card companies for alleged wrongdoing, has been largely nonfunctional since Trump took office.
In a joint statement, the banking industry was opposed to Trump's proposal.
“If enacted, this cap would only drive consumers toward less regulated, more costly alternatives," the American Bankers Association and allied groups said.
Bank lobbyists have long argued that lowering interest rates on their credit card products would require the banks to lend less to high-risk borrowers. When Congress enacted a cap on the fee that stores pay large banks when customers use a debit card, banks responded by removing all rewards and perks from those cards. Debit card rewards only recently have trickled back into consumers' hands. For example, United Airlines now has a debit card that gives miles with purchases.
The U.S. already places interest rate caps on some financial products and for some demographics. The Military Lending Act makes it illegal to charge active-duty service members more than 36% for any financial product. The national regulator for credit unions has capped interest rates on credit union credit cards at 18%.
Credit card companies earn three streams of revenue from their products: fees charged to merchants, fees charged to customers and the interest charged on balances. The argument from some researchers and left-leaning policymakers is that the banks earn enough revenue from merchants to keep them profitable if interest rates were capped.
"A 10% credit card interest cap would save Americans $100 billion a year without causing massive account closures, as banks claim. That’s because the few large banks that dominate the credit card market are making absolutely massive profits on customers at all income levels," said Brian Shearer, director of competition and regulatory policy at the Vanderbilt Policy Accelerator, who wrote the research on the industry's impact of Trump's proposal last year.
There are some historic examples that interest rate caps do cut off the less creditworthy to financial products because banks are not able to price risk correctly. Arkansas has a strictly enforced interest rate cap of 17% and evidence points to the poor and less creditworthy being cut out of consumer credit markets in the state. Shearer's research showed that an interest rate cap of 10% would likely result in banks lending less to those with credit scores below 600.
The White House did not respond to questions about how the president seeks to cap the rate or whether he has spoken with credit card companies about the idea.
Sen. Roger Marshall, R-Kan., who said he talked with Trump on Friday night, said the effort is meant to “lower costs for American families and to reign in greedy credit card companies who have been ripping off hardworking Americans for too long."
Legislation in both the House and the Senate would do what Trump is seeking.
Sens. Bernie Sanders, I-Vt., and Josh Hawley, R-Mo., released a plan in February that would immediately cap interest rates at 10% for five years, hoping to use Trump’s campaign promise to build momentum for their measure.
Hours before Trump's post, Sanders said that the president, rather than working to cap interest rates, had taken steps to deregulate big banks that allowed them to charge much higher credit card fees.
Reps. Alexandria Ocasio-Cortez, D-N.Y., and Anna Paulina Luna, R-Fla., have proposed similar legislation. Ocasio-Cortez is a frequent political target of Trump, while Luna is a close ally of the president.
Seung Min Kim reported from West Palm Beach, Fla.
President Donald Trump arrives on Air Force One at Palm Beach International Airport, Friday, Jan. 9, 2025, in West Palm Beach, Fla. (AP Photo/Julia Demaree Nikhinson)
FILE - Visa and Mastercard credit cards are shown in Buffalo Grove, Ill., Feb. 8, 2024. (AP Photo/Nam Y. Huh, File)
