Trump’s 10% credit card rate cap draws backlash; JPMorgan’s Jamie Dimon warns of ‘economic disaster’

JPMorgan Chase CEO Jamie Dimon on Wednesday (January 21) warned that President Donald Trump’s proposed 10% cap on credit card interest rates would be an “economic disaster,” saying it would shut millions of Americans out of the credit system.

Speaking at the World Economic Forum in Davos, the head of the largest US bank said the proposal would make unsecured lending unviable.

“Eighty percent of Americans will lose access to credit if this moves forward,” Dimon said.

Dimon said the fallout would ripple across the economy, far beyond banks.

“People crying the most will not be the credit card companies, it will be the restaurants, retailers, travel companies, the schools, the municipalities,” he said.

Trump called for the cap earlier this month without detailing how it would be implemented.

In a call with reporters on January 13, Barnum said banks were willing to fight “with all resources at their disposal” to stop the Trump administration from capping credit card interest rates.

Banking industry bodies have also pushed back, warning the move would ultimately reduce credit access for everyday consumers.

“Our estimate is that 90-plus percent of our clients will see a detrimental impact if there was an across-the-board 10% rate cap on credit cards,” Kedia told analysts.

“The impact to 50% of the clients will be crushing, as it will be for the economy.”

Kedia said the proposal would be “very costly for many small merchants” and would not achieve its stated goal.

“It will not achieve the goal intended,” she said.

She added that the bank is exploring ways to improve financial education so customers are better informed about available options.

“We have observed that just in the last few days, the conversation around the rate cap has shifted more productively,” Kedia said.

“A cap is not something we could or would support,” Mason said, adding it would restrict credit and harm the economy.

“Affordability is a big issue, and we look forward to collaborating with the administration on ways we can address this.”

Interest income — a major profit engine for banks — would take a substantial hit if the proposal is implemented in its current form, industry experts told Reuters.

The American Bankers Association said on Tuesday that at least 137 million cardholders, and as many as 159 million, would no longer be able to use their cards if the rate cap were imposed, citing new data from issuers, according to Reuters.

A survey by the Consumer Bankers Association found that six in 10 US adults expect a rate cap would lead banks to add fees and reduce overall credit card approvals, Reuters reported.

“We believe there is a political compromise in the works to ensure the President does not push Congress to enact a 10% cap on credit card interest rates,” TD Cowen analysts said in a note.

Trump last week told the credit card industry it had until January 20 to comply with his demand for a one-year cap at 10%. He later said companies that ignored the demand would be “in violation of the law.”

The White House has yet to outline enforcement measures. Press Secretary Karoline Leavitt said the president expects compliance. “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,” Leavitt said.