Card Issuers’ Shares Tumble After Trump Calls for a 10% Interest Rate Cap

Shares of credit card lenders fell sharply Monday after President Donald Trump called for a one-year, 10% cap on credit card interest rates that he said he hoped would be in place by Jan. 20. Synchrony Financial, Bread Financial and Capital One each dropped roughly 8% to 11% in early trading, according to Reuters reports carried by BNN Bloomberg and Kitco. American Express fell about 4%, Citigroup about 4%, and JPMorgan Chase about 2.5%.

Trump posted the proposal Friday night on Truth Social, criticizing companies that charge “Interest Rates of 20 to 30%” and saying the public should no longer be “ripped off by Credit Card Companies,” according to the Associated Press. He gave no details on how companies would be made to comply, and it was unclear whether he envisioned executive action or legislation, the AP reported. The average card interest rate was 20.97% in November, according to Federal Reserve data cited by Reuters.

The legal path is uncertain. Analysts at UBS wrote that “It would take an Act of Congress” for such a cap to take effect, given the likely legal challenges to an executive order, and Jefferies analysts wrote, “There is no executive authority to implement this, and we see this as likely dead on arrival,” according to Reuters. Reuters noted that past federal attempts to cap card rates have not gained traction.

The financial industry pushed back. The American Bankers Association and allied groups said, “If enacted, this cap would only drive consumers toward less regulated, more costly alternatives,” the AP reported. J.P. Morgan analyst Vivek Juneja argued the cap would not fix the underlying problem and could push borrowers toward pawn shops and non-bank lenders, and an analyst quoted by Reuters said lenders could reduce credit lines or cut off access to credit entirely. Buy-now-pay-later firms rose: Affirm gained about 5% and Block about 2%.

The AP noted that Wall Street and card issuers, the industry now opposing the plan, donated heavily to Trump’s 2024 campaign and were expected to push back strongly. Reuters reported that some analysts see the proposal as unlikely to survive the legal and legislative hurdles.

The idea has supporters across party lines. Sen. Roger Marshall, a Kansas Republican, said he spoke with Trump and would work on a bill with the president’s “full support,” the AP reported. Sens. Bernie Sanders, an independent from Vermont, and Josh Hawley, a Missouri Republican, proposed a five-year 10% cap in February, and Reps. Alexandria Ocasio-Cortez and Anna Paulina Luna proposed similar legislation, the AP said. Researchers at the Vanderbilt Policy Accelerator estimated a 10% cap would save Americans $100 billion a year, according to the AP, which noted that banks would remain profitable but might scale back rewards.

Bill Ryan of Seaport Research said the proposal fits Trump’s focus on affordability, a top concern for voters, Reuters reported. The scale of the market is large: the AP reported, citing the Consumer Financial Protection Bureau, that about 195 million Americans had credit cards in 2024 and were charged $160 billion in interest; the AP put total card debt at around $1.23 trillion, citing New York Fed data.

Bank earnings begin Tuesday with JPMorgan, followed by Bank of America, Citigroup and Wells Fargo later in the week, giving executives their first chance to respond on the record, Reuters said.