Jamie Dimon, the CEO of JPMorgan Chase, refrained from calling for a cap on credit card interest rates from the administration of US President Donald Trump, claiming that if Congress follows through, it will lead to “economic disaster.”
At the World Economic Forum in Davos, Switzerland on Wednesday, Dimon made his remarks.
Recommended Stories
list of 4 itemsend of list
Trump has called for legislation to require a year-long cap on interest rates on credit cards and has called for it to be done, but he has not provided a clear plan for how the cap will be implemented.
As Trump continued to call for the cap, Dimon said on Wednesday, “It would remove credit from 80% of Americans, and that is their backup credit.”
The Electronic Payments Coalition, a trade group for the banking industry, claims that credit cards for people with credit scores below 740, which account for up to 88 percent of credit card holders, could be closed or restricted if the interest rate cap is implemented.
Credit card issuers would only be required to impose limits on lending to those with credit scores below 600, and would need to lower rewards for those with FICO scores below 760. According to a report from Vanderbilt University for 2025, ten percent caps would save borrowers about $100 billion annually.
According to Trump, “surging credit card debt has been one of the biggest obstacles to saving for a down payment.”
The comments represent a rare instance of bipartisan agreement in Washington.
An unlikely alliance
Sen. Elizabeth Warren, a member of the Senate Banking Committee, claimed last week in an interview with CNBC that the president had called her to talk about working together on the proposal.
Warren responded, “Great, let’s get something done.”
Senator Bernie Sanders of Vermont’s proposed interest rate cap of 10%, which would be extended for a longer period of time, expire in 2031, is already in place, according to Trump’s comments. However, the legislation has been stumbling in Congress. In early February 2025, the Senate Committee on Banking, Housing, and Urban Affairs received its most recent report.
The president’s handling of the US economy is receiving more and more negative feedback as interest rates are being put in place. A recent CNN poll found that 63 percent of people disapprove of Trump’s handling of the economy, which was confirmed by a Wall Street Journal poll earlier this month.
Dimon said, “I believe we should test it.” Sanders and Warren represent in two states, Vermont and Massachusetts, and they should force them to do it, according to Sanders and Warren.
The credit card issuers won’t be the ones who cry the most. Because people will miss their water payments, this payment, and that payment, Dimon said, “it will be the restaurants, retailers, travel companies, travel companies, schools, municipalities.”
While his credit card interest rate idea is making headlines, “President Trump is still awaiting real people’s savings.” He claimed interest rates would be capped by January 20 last week, but this week he claims Congress is required to assist him. According to Julie Margetta Morgan, president of the economic think tank The Century Foundation, it’s still to be seen whether he’s serious about fulfilling his promise.
political challenges
There are slim chances that this bill will be passed by Congress, according to Citigroup CEO Jane Fraser and banking executives like Dimon.
The bill will face obstacles in Congress in addition to Trump’s and progressive Democrats’ support. Republican House Speaker Mike Johnson earlier this month predicted that the proposal might have “negative secondary effects.”
The president won’t attempt to personally set credit rates because he is asking Congress to pass legislation. According to Brian Jacobsen, chief economic strategist at Annex Wealth Management, it is highly unlikely that a 10 percent cap will be implemented anytime soon. If it doesn’t happen, it does give him the opportunity to point the finger at Congress.
In response to Dimon’s comments, bank stocks and credit card companies on Wall Street are largely in the minority. Both MasterCard and Visa have declined by 1.1 percent and by 1.7 percent respectively. American Express, on the other hand, has increased by 1.9 percent since the market’s opening on Wednesday.
Source: Aljazeera
Leave a Reply