Trump's 10% Credit Card Cap Deadline Looms, but Will Card Companies Comply?
With President Trump's proposed 10% interest rate cap on credit cards just hours away from expiring, the banking industry is bracing for a potential regulatory shake-up. The deadline, set by the president on January 9, was initially intended to be met with sweeping reforms across the sector.
Despite the initial optimism surrounding the proposal, card issuers have largely kept their rates unchanged, and many have expressed concerns about the lack of key policy details necessary for them to comply. Banks are also seeking more information about the cap, which Trump has announced would limit the annual percentage rate (APR) that credit issuers can charge consumers to 10% - a full 5-10 percentage points lower than current rates.
The proposed cap is backed by some lawmakers, including Sen. Elizabeth Warren and Sen. Josh Hawley, who argue it could save consumers $100 billion per year in reduced interest payments. However, the banking industry warns that the cap would force issuers to reduce credit access to millions of consumers, disproportionately affecting vulnerable borrowers.
Banks are also pushing back against the proposal, citing concerns about the lack of clarity on enforcement mechanisms and potential unintended consequences for the broader economy. "Specifically, people will lose access to credit, like on a very, very extensive and broad basis, especially the people who need it most," JPMorgan Chase's Jeremy Barnum said in an investor call.
On the other hand, one fintech company is stepping up to offer new credit cards that meet Trump's proposal. Bilt is rolling out new credit cards that cap interest rates at 10% for one year.
As the deadline for compliance looms, it remains to be seen whether card companies will ultimately comply with Trump's proposal. The White House has yet to provide details on how it plans to enforce the policy or determine if banks are meeting the proposed standards.
With the fate of the cap still uncertain, consumers can only wait and see what the future holds for their credit cards.
With President Trump's proposed 10% interest rate cap on credit cards just hours away from expiring, the banking industry is bracing for a potential regulatory shake-up. The deadline, set by the president on January 9, was initially intended to be met with sweeping reforms across the sector.
Despite the initial optimism surrounding the proposal, card issuers have largely kept their rates unchanged, and many have expressed concerns about the lack of key policy details necessary for them to comply. Banks are also seeking more information about the cap, which Trump has announced would limit the annual percentage rate (APR) that credit issuers can charge consumers to 10% - a full 5-10 percentage points lower than current rates.
The proposed cap is backed by some lawmakers, including Sen. Elizabeth Warren and Sen. Josh Hawley, who argue it could save consumers $100 billion per year in reduced interest payments. However, the banking industry warns that the cap would force issuers to reduce credit access to millions of consumers, disproportionately affecting vulnerable borrowers.
Banks are also pushing back against the proposal, citing concerns about the lack of clarity on enforcement mechanisms and potential unintended consequences for the broader economy. "Specifically, people will lose access to credit, like on a very, very extensive and broad basis, especially the people who need it most," JPMorgan Chase's Jeremy Barnum said in an investor call.
On the other hand, one fintech company is stepping up to offer new credit cards that meet Trump's proposal. Bilt is rolling out new credit cards that cap interest rates at 10% for one year.
As the deadline for compliance looms, it remains to be seen whether card companies will ultimately comply with Trump's proposal. The White House has yet to provide details on how it plans to enforce the policy or determine if banks are meeting the proposed standards.
With the fate of the cap still uncertain, consumers can only wait and see what the future holds for their credit cards.
so I'm thinking the card companies are trying to push back because they know some people won't be able to get the credit they need if the interest rates go down. it's like a game of risk vs reward - they might save consumers $100 billion, but they'll also lose out on all those customers who can't afford the lower payments 
. and what's the plan for enforcing this cap anyway? it seems kinda unclear 
. maybe Bilt is just trying to be a good guy by offering new cards that fit Trump's proposal, but we need more transparency from the White House on how this is all gonna work 
.
? seriously though, 10% interest rate cap sounds like a good thing to me... idk how card companies are gonna make it work tho 
. can't they just chill and raise the rates a lil bit or smthn? 
. but at the same time, $100 billion in savings is def a plus 
.
, so let's keep our fingers crossed it all works out 
. can we just get some answers from the White House tho? 
It sounds like a good idea in theory, but have you thought about how it's gonna affect people who need credit the most? Like, what if they can't get a loan at all because of it? That doesn't seem like progress to me... 
think about it, ppl who need credit the most are gonna lose access to it. that's super unfair 
i wish the white house had more info on how they plan to enforce this policy tho... fintech co Bilt is trying to help by offering new credit cards with 10% interest rates, but its just one company... not enough 
especially those who are already struggling financially. dont know whats the solution tho, maybe some sorta middle ground? idk what trump or lawmakers r thinking but hopefully we'll find out soon 
like what's gonna happen 2 all those people who need credit 4 different things but can't afford it rn? 10% apr seems reasonable enough 4 some ppl but 5-10 pts lower sounds super harsh, i get that ppl want 2 save $100 billion but is it really worth hurting the most vulnerable borrowers?! 
I'm low-key hyped that some lawmakers are backing this move 
with the argument that consumers will save $100 billion per year in interest payments 
it's like, we need more clarity on enforcement mechanisms ASAP 
Can't wait to see what happens next! 
The government's gotta make some rules somewhere, right? 
- Winnie-the-Pooh (on how card companies should adapt to Trump's proposal) 
i wanna see a new credit card company pop up w/ competitive rates 
. It feels like nobody's really thinking this through.
.
.