Why Banks Are So Worried About a 10% Credit Card Rate Cap
The New York Times • • business
Key Points:
- President Trump called for a one-year 10 percent cap on credit card interest rates, a move that has unsettled banks and lenders reliant on these fees for significant profits.
- There is no clear mechanism for the administration to impose such a cap unilaterally, and Congress has shown little interest in pursuing this proposal.
- Bank leaders are cautious publicly but privately warn that capping interest rates could reduce consumer access to credit and force banks to cut credit lines.
- Following the president’s statement, bank stocks with large credit card portfolios, such as Capital One and Citi, have dropped significantly, reflecting investor concern.
- JPMorgan Chase CEO Jamie Dimon indicated that such a cap would require banks to adjust their risk models dramatically,
