JPMorgan Chase, the largest U.S. bank by assets, released its fourth-quarter earnings on Tuesday. During the earnings call, Chief Financial Officer Jeremy Barnum addressed the potential impact of a credit card interest rate cap proposed by President Donald Trump.
"Slashing card interest rates could create harm for 'the people who need it the most,'" Barnum said. He warned that such a move could have detrimental effects on the bank's lending business.
"It's a very competitive business, but we wouldn't be in it if it weren't a good business for us," Barnum told analysts and shareholders. "And in a world where price controls make it no longer a good business, that would present a significant challenge."
Barnum added that the bank's response would depend on details still unknown. "Clearly beyond that, you know, the way we actually respond would have a lot to do with the details. And I just don't think we have enough information at this point," he said. A dramatic shift in lenders' card interest rates could lead to negative consequences for consumers, he noted.
On Friday, President Trump stated in a Truth Social post that he would call for a 10% cap on credit card interest for one year, starting January 20. Lawmakers from both parties have criticized card interest rates, which have remained around 20% in recent years, according to Bloomberg reports.
Congress would typically need to approve such a cap, which would reduce banks' profits.
CEO Jamie Dimon, also on the call, said reducing card interest rates could adversely affect customers with lower credit scores by limiting access to credit. "If it happened the way it was described, it would be dramatic," Dimon added.
The bank's cards business is central to its retail-focused offerings. Debit and credit card sales volume increased 7% from a year earlier, with card services sales totaling approximately $360 billion for the quarter, according to the earnings presentation.
Revenue in the consumer and community banking division rose 6% year over year to $19.4 billion. JPMorgan attributed this growth partly to higher net interest income from card services as revolving balances grew.
JPMorgan is currently in the process of taking over the Apple card from Goldman Sachs, which previously supported the tech giant's credit card offering. The transition is expected to take up to two years to complete, the bank has said.
Chase representatives previously directed Business Insider to a joint statement from several banking associations. The statement said they support Trump's goal of helping Americans access affordable credit but warned of reduced credit availability. "If enacted, this cap would only drive consumers toward less regulated, more costly alternatives," the bank said.
The proposal triggered a sell-off in major financial stocks on Monday, including JPMorgan. Trump's move continues a series of actions against large businesses, including banks.