Major US banks have lashed out at Donald Trump’s proposal to cap credit card interest rates to address affordability concerns, warning the move could undercut a crucial source of industry revenue.
JPMorgan, Citigroup and Wells Fargo this week separately said limiting borrowing costs on credit cards would harm their business model in a way that would make it prohibitive for them to extend credit to some borrowers, claiming it could hurt economic growth as a result.
The backlash comes after the president said he would introduce a one-year 10 per cent cap on credit card interest rates as part of a push to ease borrowing costs on consumers amid growing pressure to fix domestic affordability issues ahead of midterm elections later this year. Trump’s latest push follows months of relentless but fruitless pressure to have the Federal Reserve rapidly and dramatically lower US borrowing costs.