Former President Donald Trump's recent threats to regulate credit card fees have unsettled major U.S. banks, triggering a sharp sell-off in financial stocks amid earnings season. The market reaction underscores growing investor concern over potential policy shifts affecting revenue streams.
- JPMorgan Chase earned $1.8 billion from credit cards in Q4 2025
- Bank of America generated $1.3 billion in card-related interest income
- Citigroup reported $920 million in credit card net interest revenue
- Market response saw major banks' shares drop 3.4% on average post-Trump remarks
- Analysts now assign 40% chance to credit card fee regulation if Trump wins 2028
- Potential earnings impact: up to $15 billion annual loss across the sector
A surge in political rhetoric targeting credit card pricing has disrupted the earnings momentum of top-tier financial institutions. Following remarks from former President Donald Trump during a campaign rally in December 2025, where he vowed to cap credit card interest rates and fees, shares of JPMorgan Chase, Bank of America, and Citigroup declined by an average of 3.4% in early January 2026. This downturn occurred despite stronger-than-expected quarterly results across the sector. The backlash stems from the significant contribution credit card operations make to bank profitability. In Q4 2025, JPMorgan reported $1.8 billion in net interest income from credit cards alone—representing nearly 18% of its total consumer banking revenue. Similarly, Bank of America derived $1.3 billion from card interest, while Citigroup generated $920 million. These figures highlight the vulnerability of such income if regulatory changes materialize. Market analysts now estimate a 40% probability of new federal legislation limiting credit card fee structures should Trump win the 2028 election. Such a move could reduce average net interest margins for large banks by 1.5 to 2 percentage points annually, translating into potential annual earnings losses exceeding $15 billion across the industry. Investors reacted swiftly: the S&P Financials Index dropped 2.1% on January 14, outpacing broader market declines. Hedge funds began adjusting positions, with net short exposure to major banks increasing by 14% in the first week of January. The volatility signals heightened sensitivity to political risk in an already uncertain macroeconomic landscape.