Trump Considers Executive Action to Cap Credit Card Interest Rates at 10%

Trump weighs executive action to cap credit card interest rates at 10%.

What does this mean for traditional finance?

Traditional banks face potential revenue squeeze as regulatory intervention looms. The proposed 10% cap—far below current industry averages—threatens to compress profit margins on one of banking's most lucrative products.

Credit card companies scramble for response strategies.

Issuers explore fee restructuring, tighter lending standards, and reward program reductions. The move could accelerate the shift toward alternative lending models and digital payment solutions.

Digital assets emerge as parallel financial infrastructure.

Decentralized finance protocols operate without centralized rate-setting, offering transparent borrowing terms through smart contracts. Crypto-backed lending platforms bypass traditional credit systems entirely.

The regulatory pendulum swings—again.

Government intervention in pricing mechanisms creates market distortions while failing to address root causes of consumer debt. Another case of politicians treating symptoms while ignoring the disease of financial illiteracy and systemic dependency.

Financial innovation continues beyond regulatory reach.

Blockchain-based solutions develop apace, offering permissionless access to capital without arbitrary rate caps. The decentralized economy grows while traditional finance wrestles with political constraints.

Banks push back as consumers and lobbyists weigh outcomes

The issue dominated earnings calls at major banks this week. JPMorgan Chase, Citigroup, and Bank of America all raised concerns. Executives said they lack enough detail to measure the impact on their businesses.

Citigroup Chief Financial Officer Mark Mason said a government‑mandated cap could slow economic activity. Bank of America Chief Executive Officer Brian Moynihan said it could limit access to credit if banks pull back.

Bank trade groups also pushed back. “We’re talking about unsecured lending, so it’s not like an auto loan or a mortgage loan where there’s something you can take back,” said Rob Nichols, head of the American Bankers Association.

Lobbyists spent the week trying to understand how Trump might implement the order. One option under discussion is using the interstate commerce clause to override state usury limits, according to a lobbyist involved in the talks.

Some consumer advocates warned that a 10% cap could be too low and lead banks to cut lending. Others pointed to federal credit unions, which already operate under rate caps. “It’s about finding a reasonable rate that doesn’t undermine the ability of consumers who are struggling to get by,” said Adam Rust of the Consumer Federation of America.

Kevin also floated the idea that banks could voluntarily launch new Trump cards. Bilt rolled out three cards earlier this week with rates capped at 10%, though the limit lasts one year and applies only to new purchases.

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