As Trump’s Deadline for Capping Credit Card Rates Approaches, Banks Have All Questions and No Answers

NEW YORK (AP) — President Donald Trump told the credit card industry a week ago that it had until Jan. 20 to comply with his demand for a 10% cap on interest rates. With just days to go, consumer groups, politicians and bankers still don’t know exactly what the White House has planned and whether Trump remains serious about the idea.

So far, the White House has provided no details on what will happen to credit card companies that don’t lower card rates. White House press secretary Karoline Leavitt said the president “expects” that credit card companies will grant his request to cap credit card interest rates at 10 percent.

“I don’t have any specific consequences for you, but it’s certainly an expectation and frankly a demand that the president has made,” she said Friday.

A researcher who studied Trump’s proposal when Trump first floated it during the 2024 presidential campaign found that Americans would save around $100 billion in interest per year if credit card rates were capped at 10%. The same researchers found that although the credit card industry would be hit hard, it would remain profitable, even though rewards and other credit card benefits might be reduced. The administration amplified this research by posting it on one of the official White House Twitter pages.

Bank lobbyists, many of whom spent much of the last week scrambling to understand what the White House has planned for their industry, have been left in the dark. Bills have been introduced in both houses of Congress by Republicans and Democrats this year and in past years, but Republican leaders in the House and Senate have been cool to the idea of ​​passing legislation capping interest rates.

The Dodd-Frank Act, passed after the 2008 financial crisis shook up the financial industry, explicitly prohibits at least one federal banking regulator from setting usury limits on loans.

Without a law or executive order, Trump could simply use political pressure to force the credit card industry to do what he wants, as he has done with other industries. For example, Trump demanded that pharmaceutical companies reduce drug prices, leading pharmaceutical CEOs to pledge to do what he asked. Trump also asked chipmakers and technology companies to move their production to the United States, which also led companies like Apple to commit to boosting their manufacturing capacity domestically.

Wall Street has little interest in an all-out war with the White House, especially since banks have benefited from the industry-friendly deregulation program offered so far by the Trump administration. The One Big Beautiful Bill, signed into law in July, brought another round of significant tax cuts. And deregulation pushed firms to strike deals last year, resulting in a steady stream of investment banking revenue and fees for the big banks.

When it comes to credit card rates, the message from lobby groups and bank executives is twofold: They pushed back the cork but at the same time, they offered to work with the White House.

In a call with reporters Tuesday, JPMorgan Chief Financial Officer Jeffrey Barnum indicated the industry is prepared to fight with every resource at its disposal to stop the Trump administration from capping those rates. JPMorgan is one of the largest credit card companies in the country. Its customers collectively hold $239.4 billion in balances with the bank and it has major co-branding partnerships with companies including United Airlines and Amazon. JPMorgan also recently acquired the Apple Card credit card portfolio from Goldman Sachs.

Mark Mason, Citigroup’s chief financial officer, told reporters Wednesday that a cap “is not something we could or would support,” saying it would restrict credit to consumers and hurt the economy. But at the same time, Mason said, “Affordability is a major issue, and we look forward to working with the administration on ways to address this issue.” »

Trump took further aim at the credit card industry when he approved a bill in Congress that could negatively impact the amount of money banks make from merchants each time a customer swipes their card.

Not all businesses are waiting for Trump’s next move.

Fintech company Bilt launched a new set of credit cards this week and announced it would cap customer interest rates at 10% on new purchases for one year. While it is indeed a promotional rate that other credit card companies have used in the past, Bilt’s move could provide an example of how the credit card industry can meet the White House’s demands without fundamentally destroying its business model.

“If (a capping of credit card rates) is going to happen, we prefer to be at the forefront,” Bilt CEO Ankur Jain said in an interview earlier this week.