Citigroup Shares Slide 4.4% Amid Credit-Card Rate Cap Concerns
Citigroup (C) tumbled 4.4% in after-hours trading as Washington's debate over credit-card interest rate caps rattled bank stocks. The selloff reflects growing market anxiety about potential regulatory constraints on a key profit engine for lenders.
CEO Jane Fraser dismissed the likelihood of Congressional approval for strict caps, warning such measures could trigger credit tightening and reward program cuts. Banks face a delicate balancing act—maintaining profitability while navigating political pressure to curb consumer borrowing costs.
Unsecured credit cards inherently carry higher risk premiums. A 10% rate cap, analysts warn, WOULD force lenders to shrink credit availability or hike fees elsewhere—a lose-lose scenario for both banks and marginal borrowers.
