Some of America\u2019s top bankers are warning that the president\u2019s cap on credit card interest rates would prove disastrous for lower-income consumers and the US economy \u2014 not to mention their profits.<\/p>\n
Faced with President Trump\u2019s proposal to slash their credit card interest rate fee income days before reporting fourth quarter earnings, senior executives for the nation\u2019s four largest banks \u2014 JPMorgan Chase (JPM), Citigroup (C), Bank of America (BAC), and Wells Fargo (WFC) \u2014 all said they agree that affordability is an issue, but that limiting credit card interest rates isn\u2019t the right approach to solve it.<\/p>\n
\u201cAn interest rate cap is not something that we would or could support, frankly,\u201d Citigroup\u2019s outgoing CFO Mark Mason said Wednesday during a call with reporters.<\/p>\n
Such a move would \u201clikely result in a significant slowdown in the economy,\u201d Mason said, adding that \u201caffordability is clearly an important issue and one that we look forward to collaborating with the administration on.\u201d<\/p>\n
\u201cWe’re all in for affordability,\u201d Bank of America CEO Brian Moynihan told analysts on Wednesday while presenting the argument why limiting credit card interest rates would have adverse effects.<\/p>\n \u201cIf you bring the caps down, you’re going to get restricted credit, meaning less people will get credit cards, and the balance available to them on those credit cards will also be restricted. And so you have to balance that against what you’re trying to achieve on affordability,\u201d Moynihan said.<\/p>\n Shares of Wells Fargo, Bank of America and JPMorgan Chase have fallen between 5%-6% over the past week. Citi’s stock has dropped more than 7%.<\/p>\n Citigroup, Wells Fargo, and Bank of America reported fourth quarter earnings on Wednesday, while JPMorgan reported on Tuesday. Net income rose at Wells Fargo and Bank of America but declined at JPMorgan and Citigroup when compared to the fourth quarter of 2024.<\/p>\n In a post on Truth Social last Friday, President Trump called for a “one year cap on Credit Card Interest Rates of 10%.” The president has since doubled down on the proposal, saying banks that didn’t comply by Jan. 20 would be in violation. It’s not clear how Trump plans to cap card fees without an executive order, voluntary action, or Congress first passing legislation, analysts have said.<\/p>\n The potential cap\u2019s impact \u201cwould be dramatic on subprime\u201d customers, JPMorgan CEO Jamie Dimon said Tuesday.<\/p>\n \u201cWe all agree\u201d on the issue of affordability, Wells Fargo CEO Charles Scharf told analysts Wednesday during the bank\u2019s earnings call. \u201cWe’re very much aligned with trying to find solutions to help as many as we can.\u201d<\/p>\n<\/p><\/div>\n The toll of a one-year 10% cap on fees would hit large bank earnings before tax by an estimated 5%-18%, and “wipe out earnings” for lenders that exclusively focus on credit cards and related services, such as Capital One (COF) and Synchrony Financial (SYF), according to Wells Fargo analysts.<\/p>\n Citigroup\u2019s credit card balances grew 1.7% in 2025 and accounted for 23% of the total loan portfolio on its balance sheet.<\/p>\n Throughout 2025, Bank of America added 3.8 million new credit card accounts across its consumer, small business, and global wealth management groups. The bank had $103 billion in credit card loans as of the end of December, accounting for 9% of its total loans.<\/p>\n Wells Fargo\u2019s credit card fees over 2025 rose 8% to $6.37 billion. Since regulators loosened the bank\u2019s multiyear growth restriction tied to a fake account scandal in the 2010s, it is pursuing growth strategies on almost every front, including its credit card business.<\/p>\n For major issuer JPMorgan, the call comes at an especially inopportune moment. Last week, the nation\u2019s largest bank announced that it reached a deal to take over Goldman Sach\u2019s Apple credit card partnership. While the deal took over a year to negotiate between various parties and won\u2019t be completed for two years, the bank set aside a $2.2 billion credit provision to cushion against future potential losses.<\/p>\n \u201cIf you wind up with weakly supported directives to radically change our business that aren’t justified, you have to assume that everything’s on the table. We owe that to our shareholders, but I think it’s a little bit too early to say more than that,\u201d JPMorgan CFO Jeremy Barnum told reporters on Monday.<\/p>\n David Hollerith covers the financial sector<\/em>, ranging from the country’s biggest banks to regional lenders, private equity firms, and the cryptocurrency space.<\/em><\/p>\n<\/div>\n<\/div>