Wall Street is scrambling to respond to US President Donald Trump’s attacks on credit card practices, with banks exploring options ranging from offering a capped-interest card to promotional rate relief. These considerations come as the industry prepares for potential confrontations over proposed regulations. Trump recently demanded credit card lenders cap interest rates at 10 per cent for a year and urged support for the Credit Card Competition Act, which targets the fees banks collect from merchants.
Executives are privately strategising, considering both conciliatory measures and defensive strategies. Some banks are contemplating offering a credit card with a 10 per cent interest rate cap. Others are exploring temporary rate relief promotions for customers. Should these efforts fail to appease Trump, insiders suggest the industry may resort to lobbying, advertising campaigns focused on consumer benefits, and potential lawsuits.
The pressure is mounting as banks begin reporting 2025 earnings. JPMorgan Chase & Co’s chief financial officer, Jeremy Barnum, stated that a rate cap would be detrimental to both consumers and the economy. Analysts, who predict a broad 10 per cent cap on credit card interest rates would significantly impact earnings, have questioned JPMorgan’s executives on their response strategy and the potential costs of such a policy. Other major banks, including Citigroup, Bank of America, and Wells Fargo & Co, are also scheduled to report results.
Compromise solutions are under discussion, with lenders weighing options such as one-year promotional offers for existing cardholders. Joseph Schuster, a partner at Ballard Spahr specializing in financial regulation, noted that various promotional offers are being considered. JPMorgan Chase & Co. is a global financial services firm offering investment banking, asset management, and retail banking. Citigroup Inc. is a diversified financial services holding company providing a range of financial products and services to consumers, corporations, and governments.
