Former President Donald Trump has reignited debate over consumer finance policy by advocating for a 10% cap on credit card interest rates, sparking immediate backlash from major banking executives and industry groups. The proposal threatens the profitability of top financial institutions, particularly in the credit card lending segment.
- Trump proposes a 10% cap on credit card interest rates, a sharp reduction from current average APRs of 19%-29.99%
- Major banks including JPM, BAC, C, WFC, and MA oppose the measure, citing risks to credit access and profitability
- Industry estimates suggest a potential $12–15 billion annual loss in net interest income for top U.S. banks
- The proposal has triggered market volatility, particularly in consumer lending and payments segments
- Despite low legislative feasibility, the policy debate is influencing investor risk assessments and regulatory expectations
- The issue reflects broader political tension between consumer protection goals and financial sector profitability
Former President Donald Trump has surfaced a bold new policy proposal calling for a federal cap on credit card interest rates at 10%, reigniting a high-stakes political and regulatory confrontation with the banking sector. The suggestion, unveiled during a recent public address, marks a significant pivot from previous positions and reflects a strategic effort to reframe economic messaging ahead of a potential 2028 campaign. The proposal directly targets the core revenue engine of major credit card issuers, which currently charge average annual percentage rates (APRs) ranging from 19% to 29.99% on unsecured balances. The banking industry has reacted swiftly and uniformly against the proposal. Executives from JPMorgan Chase (JPM), Bank of America (BAC), Citigroup (C), Wells Fargo (WFC), and Mastercard (MA) issued statements emphasizing that such a cap would undermine lending standards, reduce consumer access to credit, and jeopardize financial stability. Industry lobbyists estimate that a 10% rate cap could reduce annual net interest income for the top five U.S. banks by $12–15 billion, depending on loan volumes and delinquency trends. Analysts note that while the proposal faces steep legislative and constitutional hurdles, its political resonance could pressure regulators or prompt state-level actions. The move has already triggered defensive positioning in financial markets, with shares in consumer finance-focused institutions showing elevated volatility. Credit card receivables portfolios, which contribute significantly to net interest margins at JPM and BAC, are under renewed scrutiny. The confrontation underscores a growing rift between populist economic messaging and entrenched financial interests. Even if the cap is not enacted, the mere possibility has intensified regulatory uncertainty, affecting investor sentiment and risk assessments across the banking and payments sectors.