(Yahoo! Finance) - Some of America’s top bankers are warning that the president’s cap on credit card interest rates would prove disastrous for lower-income consumers and the US economy — not to mention their profits.
Faced with President Trump’s proposal to slash their credit card interest rate fee income days before reporting fourth quarter earnings, senior executives for the nation’s four largest banks — JPMorgan Chase (JPM), Citigroup (C), Bank of America (BAC), and Wells Fargo (WFC) — all said they agree that affordability is an issue, but that limiting credit card interest rates isn’t the right approach to solve it.
“An interest rate cap is not something that we would or could support, frankly,” Citigroup’s outgoing CFO Mark Mason said Wednesday during a call with reporters.
Such a move would “likely result in a significant slowdown in the economy,” Mason said, adding that “affordability is clearly an important issue and one that we look forward to collaborating with the administration on.”
“We're all in for affordability,” Bank of America CEO Brian Moynihan told analysts on Wednesday while presenting the argument why limiting credit card interest rates would have adverse effects.
“If you bring the caps down, you're going to get restricted credit, meaning less people will get credit cards, and the balance available to them on those credit cards will also be restricted. And so you have to balance that against what you're trying to achieve on affordability,” Moynihan said.
Shares of Wells Fargo, Bank of America and JPMorgan Chase have fallen between 5%-6% over the past week. Citi's stock has dropped more than 7%.
Citigroup, Wells Fargo, and Bank of America reported fourth quarter earnings on Wednesday, while JPMorgan reported on Tuesday. Net income rose at Wells Fargo and Bank of America but declined at JPMorgan and Citigroup when compared to the fourth quarter of 2024.
In a post on Truth Social last Friday, President Trump called for a "one year cap on Credit Card Interest Rates of 10%." The president has since doubled down on the proposal, saying banks that didn't comply by Jan. 20 would be in violation. It's not clear how Trump plans to cap card fees without an executive order, voluntary action, or Congress first passing legislation, analysts have said.
The potential cap’s impact “would be dramatic on subprime” customers, JPMorgan CEO Jamie Dimon said Tuesday.
“We all agree” on the issue of affordability, Wells Fargo CEO Charles Scharf told analysts Wednesday during the bank’s earnings call. “We're very much aligned with trying to find solutions to help as many as we can.”
The toll of a one-year 10% cap on fees would hit large bank earnings before tax by an estimated 5%-18%, and "wipe out earnings" for lenders that exclusively focus on credit cards and related services, such as Capital One (COF) and Synchrony Financial (SYF), according to Wells Fargo analysts.
Citigroup’s credit card balances grew 1.7% in 2025 and accounted for 23% of the total loan portfolio on its balance sheet.
Throughout 2025, Bank of America added 3.8 million new credit card accounts across its consumer, small business, and global wealth management groups. The bank had $103 billion in credit card loans as of the end of December, accounting for 9% of its total loans.
Wells Fargo’s credit card fees over 2025 rose 8% to $6.37 billion. Since regulators loosened the bank’s multiyear growth restriction tied to a fake account scandal in the 2010s, it is pursuing growth strategies on almost every front, including its credit card business.
For major issuer JPMorgan, the call comes at an especially inopportune moment. Last week, the nation’s largest bank announced that it reached a deal to take over Goldman Sach’s Apple credit card partnership. While the deal took over a year to negotiate between various parties and won’t be completed for two years, the bank set aside a $2.2 billion credit provision to cushion against future potential losses.
“If you wind up with weakly supported directives to radically change our business that aren't justified, you have to assume that everything's on the table. We owe that to our shareholders, but I think it's a little bit too early to say more than that,” JPMorgan CFO Jeremy Barnum told reporters on Monday.
By David Hollerith - Senior Reporter
