Senior executives from America’s largest banks are expressing strong opposition to President Trump’s proposal to cap credit card interest rates at 10% for a one-year period. The move, advocated for by the President through posts on Truth Social, raises significant concerns within the financial industry regarding potential economic consequences and impacts on bank profitability. Just days before reporting their fourth-quarter earnings, CEOs and CFOs from JPMorgan Chase (JPM), Citigroup (C), Bank of America (BAC), and Wells Fargo (WFC) voiced their reservations, asserting that addressing affordability is a priority, but a rate cap is not the appropriate solution.
The proposed policy, announced by President Trump last Friday and subsequently reiterated, has prompted a swift reaction from the banking sector. Analysts believe that a mandatory cap on credit card interest rates could lead to a substantial slowdown in the overall economy. The banks’ concerns center on the potential for reduced credit availability and a contraction in the market for credit cards. They argue that limiting interest rates could result in a restricted supply of credit, potentially impacting consumers’ ability to access credit cards and leading to a smaller balance available on those cards. The banks emphasize the need to carefully balance efforts to improve affordability with the potential consequences for credit expansion.
The potential effects of a 10% rate cap are projected to significantly impact the earnings of major financial institutions. Wells Fargo analysts estimate that the policy could reduce pre-tax earnings by 5% to 18% for banks, particularly those heavily focused on credit card lending—including companies like Capital One (COF) and Synchrony Financial (SYF). The banks’ projections underscore the considerable financial risk associated with the proposed policy, particularly for institutions reliant on credit card revenue.
Several banks have already reported fourth-quarter earnings, revealing varying financial results. Wells Fargo and Bank of America saw net income increases compared to the fourth quarter of 2024, while JPMorgan Chase and Citigroup experienced declines. Citigroup’s credit card balances grew by 1.7% in 2025 and comprised 23% of its total loan portfolio. Bank of America added 3.8 million new credit card accounts across its consumer, small business, and global wealth management groups, holding $103 billion in credit card loans, accounting for 9% of its total loans. Wells Fargo’s credit card fees rose 8% to $6.37 billion, coinciding with the lifting of a multiyear growth restriction tied to a past regulatory issue.
JPMorgan Chase is pursuing a strategic expansion in the credit card sector, having recently reached a deal to take over Goldman Sachs’ Apple credit card partnership, a negotiation that spanned over a year. The bank has set aside a $2.2 billion credit provision to mitigate potential future losses associated with this new venture. JPMorgan Chase CFO Jeremy Barnum stressed the importance of carefully evaluating any potentially disruptive directives, prioritizing shareholder value while acknowledging the early stage of the discussion.
David Hollerith, a financial sector analyst, covers a broad range of companies, including major banks, regional lenders, private equity firms, and the cryptocurrency space. His reporting provides in-depth analysis of stock market news and events shaping stock prices.
