Bank CEOs warn rate cap would have 'unintended consequences'

Core Viewpoint - Bank CEOs are expressing significant concern regarding President Trump's proposal for a 10% cap on credit-card interest rates, highlighting potential negative impacts on credit access and consumer spending [9]. Industry Reactions - Brian Moynihan, CEO of Bank of America, stated that implementing a cap would constrict credit and lead to unintended consequences, emphasizing the importance of affordability [2][3]. - Citi's CEO Jane Fraser opposed the cap, warning that it would severely impact access to credit for consumers and businesses, potentially forcing them to seek predatory alternatives [3]. - Wells Fargo's CEO Charlie Scharf acknowledged the importance of affordability but suggested that the response to the issue should be carefully considered [4]. Financial Implications - Analysts predict that a cap on credit-card interest rates could significantly reduce earnings for banks with large card portfolios, with estimates suggesting it could wipe out card earnings for a year [7][10]. - The average credit-card interest rate was reported at 21.39% in Q3 2025, indicating that a 10% cap would drastically alter the current economic landscape for credit cards [6][11]. - JPMorganChase's CFO Jeremy Barnum noted that the cap would negatively affect both consumers and the broader economy, leading to a loss of credit access for those who need it most [15][16]. Market Reactions - Shares of Synchrony Financial and Bread Financial Holdings, which are heavily reliant on interest income, have seen declines of approximately 11% and 14% respectively since the proposal [12]. - Larger banks with diversified business models may experience smaller impacts, but they still face challenges due to the proposed one-year time limit on the cap [12][13]. Legislative Outlook - Analysts believe there is a "very low chance" that the 10% cap will pass Congress, as it could undermine the Treasury's goal of encouraging banks to lend more [8][14]. - The legal feasibility of implementing and enforcing such a cap is also questioned, with some analysts suggesting it may be difficult to achieve [14].