Will the banking sector blow off the 10% credit card cap?

WABAC

CNBC reports:

JPMorgan Chase

CFO Jeremy Barnum hinted Tuesday the industry could fight President Donald Trump’s demand for credit card price controls, saying “everything’s on the table.”

“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,” Barnum said in a call with reporters following JPMorgan’s fourth-quarter earnings report. “We owe that to shareholders.”

/snip

“Our belief is that actions like this will have the exact opposite consequence to what the administration wants for consumers,” Barnum said. “Instead of lowering the price of credit, we’ll simply reduce the supply of credit, and that will be bad for everyone: consumers, the wider economy, and yes, at the margin, for us.”

Dear Leader has no legal authority to impose his will on the banks. My guess is that they will just ignore the high-decibel bloviations. Of course the CEO's would run the risk of having their mortgage papers and building permits sifted by the DOJ.

WABAC

CNBC reports:

JPMorgan dipped more than 2% after CFO Jeremy Barnum signaled that the banking industry could push back against President Donald Trump’s call for a one-year 10% cap on credit card interest rates. Goldman Sachs followed JPMorgan lower, declining more than 1%. Other financial stocks such as Mastercard and Visa traded down roughly 5% each. The State Street Financial Select Sector SPDR ETF (XLF) and Invesco KBW Bank ETF (KBWB) were also under pressure.

“The path forward isn’t necessarily clear,” Tim Holland, chief investment officer at Orion, said, adding that he anticipates pushback from both a legal and Congressional point of view if Trump were to move forward with his demand for price controls. He also said that he doesn’t believe the development is “that meaningful” in the near term.

Dear Leader has no legal authority to impose a cap, so I don't know what legal options the banking sector would need to pursue.

DrVenture

And trump has no idea what he is doing, either. Micromanaging everything, based on whims and horrible advice. This notion that a guy who managed to bankrupt casinos, knows everything about everything, is bizarre.

Sven

These moves are deflecting tactics on Epstein files that were suppose to be released. Guess someone is busy redacting the documents.

Isn’t he over-stepped his authority ? That is reserved for the CEOs of the banks. Banks in the public markets answer to the shareholders and board of director. For sure they do not answer to the President.

msf

That is reserved for the CEOs of the banks.

Interest rates charged by credit cards are regulated. But by states, not by federal law. In 1980, Citibank moved its credit card division to South Dakota to take advantage of its lenient regulations. And the rest is history.

The lack of a usury law in South Dakota combined with a Supreme Court ruling that said companies could use the state’s laws where the company was headquartered led to a financial boom. Even if a card was used in another state, South Dakota laws governed interest rates.

https://www.sdnewswatch.org/giga-fact-brief-sd-credit-card-companies-citi-wells-fargo/

See also: https://www.bankrate.com/credit-cards/zero-interest/does-law-cap-credit-card-interest-rates/

Congress has the power to step in and impose federal limits on rates. But does Congress have the capability to pass any legislation these days?

Sven

@msf, i stand corrected on my earlier statement.

But does Congress have the capability to pass any legislation these days?

the answer is no!. So far, congress defers their authority to the President. Who actually represent the wills of the people?

Observant1

Crash

From the Bush Leagues:
5-day performance.
FBP -0.43%
BLX: +1.16%

a2z

it's clear that trump is floating this NOW to check its ratings prior to midterms.
gop voters will need to feel they personally benefited from trump somewhere, rather than just entertainment (grievance+retribution).
its also clear how the banking lobby, like any lobby, will make an attempt to 'convince' trump to lose interest in the topic.
if banks fail on trump,they will just cut loose bad credit low income...and much MAGA included.

bee

I always pay off my credit card balance in full each month.

I try to use cash or my debit card to avoid the 3% credit card transaction fee that now seems ubiquitous in many restaurants and retailers today.

Putting a cap on Credit Card Rates...Who is this harming?

The CC companies will tell you that lower rates on Credit cards will harm poor people...hmm.

Here's Warren's Advice (not Elizabeth):

Buffett shared an anecdote about a friend who had recently come into some money. When she asked for advice on what to do with the funds, Buffett’s first question was about her credit card debt.

He stressed the importance of paying off high-interest debt, stating, “If I owed any money at 18%, the first thing I'd do with any money I had would be to pay it off. I think people should avoid using credit cards as a piggy bank to be raided.”

“Because paying it off is gonna be way better than any investment idea that I've got. And that wasn't what she wanted to hear," he added.

buffett-advises-against-using-credit

Mark

Mr. Buffett was and still is absolutely correct.

Sven

Unlike other billionaires such as Bezo, Warren Buffet is as down to earth as they come.

msf

I try to use cash or my debit card to avoid the 3% credit card transaction fee that now seems ubiquitous in many restaurants and retailers today.

My guess about why the fee is 3% is that Visa limits surcharges to 3% (MC limit AFAIK is 4%). It's difficult for a merchant to add a different surcharge based on the card used. But merchants are now allowed to decline cards for which the merchant is charged a higher fee.

https://www.afslaw.com/perspectives/alerts/visa-reduces-its-merchant-surcharge-cap-3-effective-april-15-2023-merchants
https://www.cnbc.com/2025/11/13/visa-mastercard-legal-settlement-what-you-need-to-know.html

For restaurants, Chase Freedom cards are currently offering 5% back (rotating categories by calendar quarter). BofA Premium Rewards ($95 annual fee) offers 3% - 3.5% back (w/$50K+ or $100K+ invested w/Merrill), Wells Fargo Autograph cards offer 3% back, Capital One Savor offers 3% back, AAA Travel Advantage card offers 3% back.

Note that BofA may be changing its cash back policies soon:

Bank of America says benefits will change once the new program launches, but it hasn’t shared the details yet. That’s the big unknown for now.

The good news is that when the bank adjusted tiers in the past, it didn’t mess with the core rewards. Because of that, there’s hope the popular 75% credit card rewards boost for $100,000+ customers sticks around.

https://upgradedpoints.com/news/bank-of-america-bofa-rewards-changes-2026/

Banks are going to get their pound and a half of flesh one way or another. When squeezed in one area they often resort to making free accounts harder to get, or eliminating them completely, thus harming lower income people, possibly debanking them. Regulations need to be more comprehensive to protect those at greatest risk.

bee

@msf said,

Banks are going to get their pound and a half of flesh one way or another. When squeezed in one area they often resort to making free accounts harder to get, or eliminating them completely, thus harming lower income people, possibly debanking them. Regulations need to be more comprehensive to protect those at greatest risk

Great Point!