Under threat from Trump, Wall Street banks wager they can fend off credit card price controls
The nation's largest banks are openly rejecting President Donald Trump's directive to slash credit card interest rates to 10%, setting the stage for a direct confrontation as the President prepares to address global leaders at the World Economic Forum in Davos.
Executives from JPMorgan Chase and Citigroup have warned that imposing such a cap would force them to close accounts for many customers rather than comply. "An interest rate cap is not something that we would or could support," stated Citigroup CFO Mark Mason, arguing it would "restrict access to credit to those who need it the most" and harm the economy.
JPMorgan CFO Jeremy Barnum hinted at potential legal challenges, stating that "everything's on the table" in terms of the industry's response. The pushback comes despite Trump's assertion that banks failing to comply by his January 20 deadline would be "in violation of the law." However, no such federal law currently exists, and a stalled congressional bill proposing a five-year 10% cap lacks broad support, including from key Republicans like House Speaker Mike Johnson.
Industry insiders note that banks have received no formal guidance from the administration, leading some to hope the threat is not serious. Analysts at Wolfe Research suggest a negotiated outcome is possible, drawing parallels to Trump's past dealings with pharmaceutical companies, where threats yielded some concessions but not major structural changes.
The financial sector is closely watching two upcoming events: potential Senate action on related bills this month and Trump's scheduled speech at Davos on January 22. Last year's forum saw Trump publicly accuse bank CEOs of political discrimination, indicating he may use the global stage to escalate pressure.
With banks asserting they are currently operating within the law and showing no intention to voluntarily implement rate caps, a protracted political and legal battle appears imminent.
