This story was originally published on Banking Dive. To receive daily news and insights, subscribe to our free daily Banking Dive newsletter. Dive Brief: Citi is considering selling more stakes in its Mexican retail-banking unit Banamex while continuing to prepare for a public sale of its remaining shares, CFO Mark Mason said Wednesday.  “We are actively looking at selling some additional, smaller stakes as we lead up to an [initial public offering],” Mason said Wednesday during a media call on the bank ...

So it should come as no surprise that the entire banking industry has circled the wagons against a cap on credit card interest rates, especially one as stringent as 10%. On Jan. 9, the very day of Trump's announcement, five leading bank lobbying organizations issued a joint statement asserting that a 10% cap would be "devastating for millions of American families and small business owners who rely on and value their credit cards, the very consumers this proposal intends to help.""Almost 30% of that is pure ...

JPMorgan CFO Jeremy Barnum warned Tuesday that President Donald Trump's push to put a 10% cap on credit card interest rates could hurt the broader economy and reduce access to credit. "What's actually simply going to happen is that the provision of the service will change dramatically. Specifically, people will lose access to credit, like on a very, very extensive and broad basis, especially the people who need it," Barnum said during a call tied to the bank’s fourth-quarter earnings release. Barnum said th ...

Core Viewpoint - The proposal to cap credit card interest rates at 10% by President Trump could have significant negative consequences for consumers and the economy, according to corporate executives from major companies [1][3]. Group 1: Impact on Consumers - JPMorgan Chase CEO Jamie Dimon indicated that the implementation of the proposed interest rate cap would be dramatic, potentially limiting access to credit for consumers, particularly those with subprime risk profiles [1][3]. - CFO of JPMorgan, Jeremy Barnum, noted that service changes would likely occur, affecting credit card users with higher risk, leading to increased financial instability for these consumers [2]. - Delta Air Lines CEO Ed Bastian expressed concerns that the proposal would restrict lower-end consumers from accessing credit, fundamentally disrupting the credit card industry [5]. Group 2: Economic Ramifications - Barnum warned that limiting access to credit could have severe negative consequences for the economy as a whole, particularly affecting those who rely on credit the most [3]. - Delta's revenue from its co-branded credit card partnership with American Express grew by 11% year over year, highlighting the importance of credit card revenue streams for companies [4]. - Bastian emphasized the challenges of implementing such a policy, suggesting it could upend the entire credit card industry and create unintended consequences [5].

Trump called for a one-year cap on credit card interest rates at 10%. For years, limited regulation has allowed companies to charge high rates, and consumers have fallen further into debt. Some lawmakers have said they would pass legislation capping interest rates. Americans are racking up credit card debt, and it's costing them even more to get rid of it. It's a piece of the affordability debate that has caught the attention of both parties. In a move that has been pushed for by lawmakers acros ...

So, how bad is the credit crunch in the U.S., and would a 10% cap on interest rates help or harm American consumers?Unsurprisingly, financial institutions also have no interest, so to speak, in a 10% cap (5), with a group of major banking associations and organizations releasing a joint statement claiming the move would “reduce credit availability and be devastating for millions of American families and small businesses,” driving many “toward less regulated, more costly alternatives.”But it’s unclear how mu ...

Capital One (COF) shares plunged nearly 7% on Monday after President Donald Trump proposed capping credit card interest rates at 10% for one year. The announcement sent shockwaves through the financial services sector and raised questions about the stock's bullish Wall Street consensus. Trump caught bank executives off guard and triggered a broad selloff across the industry. Shares of major banks, including Citigroup (C), J.P. Morgan Chase (JPM), Wells Fargo (WFC), and Bank of America (BAC), dropped betwe ...

A proposed cap on credit card rates would “significantly change” JPMorgan Chase's business and harm its customers, the bank warned Tuesday, after President Donald Trump called for the policy earlier this month. “If it were to happen, it would be very bad for consumers, very bad for the economy,” JPMorgan's CFO Jeremy Barnum said Tuesday on an earnings call, adding that the bank’s card operation “would be a business that we would have to significantly change” if it came into place. “Our ‌belief is that a ...

Core Viewpoint - President Trump's proposal to impose a 10% cap on credit card interest rates aims to protect consumers from high-interest rates, but it may lead to significant restrictions on credit access for many Americans, particularly low to moderate-income households [2][3][7]. Impact on Consumers - The Electronic Payments Coalition (EPC) estimates that 82% to 88% of credit card holders could see their cards eliminated or their credit limits drastically reduced due to the proposed cap [3][4]. - Nearly all credit card accounts associated with a credit score below 740 would be closed or severely restricted, affecting approximately 175 million to 190 million American cardholders [7]. - The average credit score for low-income Americans is reported at 658, while it is 735 for middle-income households, indicating a significant disparity in credit access [7]. Impact on Small Businesses - Small business owners, who often use personal credit cards alongside business accounts, would face compounded restrictions, affecting their financial operations [15][16]. - The reliance on credit cards for cash flow is critical for small businesses, with 98% of them making under a million dollars in gross receipts annually [16]. Changes in Credit Access - Remaining cardholders would experience lower credit limits, tighter underwriting standards, and reduced or eliminated rewards, regardless of their credit scores [8]. - Consumers may turn to riskier alternatives, such as payday lenders and unregulated online lenders, which are exempt from the proposed cap [11].

Core Viewpoint - President Trump is advocating for a temporary cap on credit card interest rates at 10% for one year, pressuring credit card companies to comply by January 20, 2024, which could significantly impact consumers and the credit market [1][2]. Group 1: Current Credit Card Rates - The average credit card interest rate for accounts with assessed interest is currently 22.30%, a significant increase from 13.35% in mid-2016 [3]. - Credit card margins, the difference between credit card APRs and the prime rate, have increased, contributing to the rise in credit card rates [4]. Group 2: Potential Impact of the Rate Cap - A 10% interest rate cap could provide substantial savings for the 46% of American households with credit card debt, allowing them to pay down balances more quickly [5][10]. - For example, a $6,000 balance at a 22% APR would require monthly payments of $561 to pay off in a year, while at a 10% rate, payments would drop to $527, saving over $400 in interest [10]. Group 3: Long-term Consequences - Experts warn that a rate cap could lead to reduced credit availability, as issuers may tighten lending standards if they cannot charge higher rates to mitigate risk [15][14]. - A joint statement from banking industry groups indicates that a 10% cap could be devastating for many consumers who rely on credit cards [15]. Group 4: Rewards and Benefits - Limiting credit card interest rates may also lead to reduced rewards and benefits associated with credit cards, as these programs are often funded by interest fees [17][18]. - Experts suggest that banks may raise annual fees or reduce the value of rewards programs if a rate cap is implemented [18]. Group 5: Alternatives for Debt Management - Consumers are encouraged to explore balance transfer credit cards with introductory 0% APR offers as a more effective way to manage credit card debt than waiting for a potential rate cap [20][21].