Bank lobby slams Trump's 'devastating' threat to credit card interest

Core Insights - President Trump's proposal to cap credit card interest rates at 10% has sparked significant backlash from bank lobbyists and resulted in declines in stock prices for major credit card issuers [1][2][4] Group 1: Market Reaction - Stocks for credit card issuers, including Citi, JPMorgan Chase, and Bank of America, fell more than 1%, while Capital One, Synchrony Financial, and American Express dropped over 5% [2] - Visa and Mastercard also experienced declines of more than 2% [2] Group 2: Industry Perspectives - SoFi CEO Antony Noto indicated that a 10% cap would likely lead to a significant contraction in credit card lending, as issuers would struggle to maintain profitability [3] - Bank trade groups expressed concerns that the cap would reduce credit availability, negatively impacting millions of American families and small businesses [5] - The Electronic Payments Association reported that 82% to 88% of open credit card accounts could lose access to credit under the proposed cap, with 175-190 million American cardholders potentially affected [6][7] Group 3: Legislative Context - The proposal requires Congressional approval, as the president does not have the authority to unilaterally impose such a cap [11][12] - Bipartisan efforts have been made to cap credit card interest rates, with Senators Bernie Sanders and Josh Hawley previously introducing similar legislation [11] Group 4: Economic Implications - The Electronic Payments Association warned that the cap could drive consumers towards less regulated and more costly credit alternatives, such as payday lenders and unregulated online lenders [6][8] - Industry experts argue that government price controls may reduce access to credit rather than making it more affordable, potentially harming families and the economy [8]