JPMorgan Chase says banks could fight
JPMorgan Chase CFO Jeremy Barnum hinted on Tuesday that the banking industry may push back against President Donald Trump’s call for credit card price controls, stating that “everything’s on the table.” Barnum made these comments during a call with reporters following JPMorgan’s fourth-quarter earnings report. He emphasized the need to consider all options when faced with directives that could significantly impact their business without proper justification.
The discussion arose in response to Trump’s recent demand for credit card companies to limit interest rates to 10% for a year. Banks and industry experts argue that such a mandate would lead to a reduction in the number of credit card accounts available to consumers and a decrease in spending, as companies would opt to close accounts rather than operate at an unprofitable level.
Currently, the average credit card interest rate in the United States stands at 19.7%, with rates for subprime borrowers and store-specific cards typically higher. Barnum expressed concerns that implementing a rate cap could have unintended consequences, such as limiting access to credit rather than making it more affordable for consumers.
While Trump has stated that banks failing to comply with the directive would be in violation of the law, it remains unclear how such a mandate would be enforced, as there is currently no federal law in place capping credit card rates. A bill introduced last year by Senators Josh Hawley and Bernie Sanders proposing a 10% APR limit for five years has yet to make progress in Congress.
The potential impact of Trump’s proposed rate cap has raised concerns beyond the banking industry. Delta Air Lines CEO Ed Bastian warned that the measure would disrupt the entire credit card industry, while House Speaker Mike Johnson urged caution in considering the broader implications of reducing costs without unintended negative consequences.
As discussions around Trump’s call for credit card price controls continue, stakeholders in various sectors, including airlines and retailers, are closely monitoring the situation. The uncertainty surrounding the enforcement and implications of such a mandate underscores the need for thoughtful consideration and collaboration among policymakers, industry leaders, and consumer advocates.
CNBC’s Emily Wilkins contributed to this report.
