President Donald Trump gave the credit card industry until January 20 to comply with his call for a 10% cap on interest rates. With the deadline approaching, consumer groups, politicians, and bankers are unsure of the White House's plans and whether the president remains committed to the idea.
The White House has not detailed consequences for companies that fail to lower rates. Press Secretary Karoline Leavitt stated on Friday that the president has "an expectation" that credit card companies will cap interest rates at 10%. She said, "I don't have a specific consequence to outline for you but certainly this is an expectation and frankly a demand that the president has made."
Research from the 2024 presidential campaign, amplified by the administration on a White House Twitter page, found that Americans could save about $100 billion annually with a 10% cap. The study noted the credit card industry would remain profitable, though rewards might be reduced.
Bank lobbyists have spent the past week trying to understand the White House's intentions, with little clarity. Bills on interest rate caps have been introduced in Congress by both parties, but Republican leadership has been resistant. The Dodd-Frank Act prohibits federal bank regulators from setting usury limits on loans.
Without new laws or orders, Trump may rely on political pressure, as seen with pharmaceutical companies and tech firms. Wall Street prefers to avoid conflict, having benefited from Trump's deregulatory policies and tax cuts.
Bank lobbying groups and executives have pushed back on the cap while offering to cooperate. On Tuesday, JPMorgan CFO Jeffrey Barnum indicated the industry would use all resources to oppose the cap. JPMorgan, a major credit card issuer with $239.4 billion in balances, has partnerships with United Airlines and Amazon and recently acquired the Apple Card portfolio.
Citigroup CFO Mark Mason told reporters on Wednesday that a cap "is not something we could or would support," citing potential harm to credit access and the economy. He added, "Affordability is a big issue, and we look forward to collaborating with the administration on ways we can address this."
Trump has also endorsed a congressional bill that could reduce bank earnings from card swipes. Meanwhile, fintech company Bilt launched new credit cards this week, capping interest rates at 10% on new purchases for a year. Bilt CEO Ankur Jain said in an interview, "If (a credit card rate cap) is going to happen, we'd rather be at the forefront."