With a critical deadline set by former President Donald Trump just days away, the American banking sector finds itself in a state of high-stakes uncertainty. Trump has demanded that credit card companies cap interest rates at 10% by January 20, but with no clear enforcement plan from the White House, industry leaders are left with more questions than answers.
White House Pressure and Industry Pushback
President Trump issued his ultimatum to the credit card industry one week ago, giving them until January 20 to comply with the 10% rate ceiling. White House Press Secretary Karoline Leavitt stated the president has "an expectation and frankly a demand," but notably failed to outline any specific consequences for non-compliance. This lack of detail has created a vacuum, leaving consumer groups, politicians, and bankers scrambling to understand the administration's intentions.
The push for a cap is not without precedent in Trump's approach to business. He has previously used political pressure to force concessions from pharmaceutical companies on drug prices and compelled tech firms like Apple to increase domestic manufacturing. However, imposing a widespread cap on credit card rates presents a far more complex regulatory challenge.
Banking Giants Signal Resistance and Willingness to Talk
The response from major financial institutions has been a careful blend of defiance and diplomacy. JPMorgan Chase, one of the nation's largest credit card issuers with $239.4 billion in customer balances, has indicated a readiness to fight. Chief Financial Officer Jeffrey Barnum suggested the industry would use all resources at its disposal to stop the administration from capping rates.
Similarly, Citigroup's CFO, Mark Mason, stated a cap "is not something we could or would support," warning it would restrict consumer credit and harm the economy. Yet, in a conciliatory tone, Mason added that affordability is a significant issue and expressed a desire to collaborate with the administration on solutions.
This dual messaging reflects a delicate balancing act. Banks have greatly benefited from the Trump administration's deregulatory agenda and tax cuts, such as the One Big Beautiful Bill signed in July. An all-out war with the White House is in no one's interest, but the potential hit to a core revenue stream is immense.
Legal Hurdles and a Potential Path Forward
Enforcing a nationwide cap is fraught with legal complications. The Dodd-Frank Act, passed after the 2008 financial crisis, explicitly prohibits at least one federal bank regulator from setting usury limits on loans. Furthermore, while bills have been introduced in both houses of Congress by Republicans and Democrats, party leadership has been cool to the idea of passing a law.
Research highlighted by the administration, originating from Trump's 2024 campaign, suggests Americans could save roughly $100 billion annually under a 10% cap. The same study concluded the credit card industry would remain profitable, though rewards programmes would likely be scaled back.
Some companies are not waiting for clarity. Fintech firm Bilt launched new cards this week with a 10% rate cap on new purchases for one year. CEO Ankur Jain framed the move as being at the "forefront" of potential change, demonstrating how the industry might adapt its business model under pressure without completely dismantling it.
As the clock ticks down to January 20, the standoff continues. Whether Trump will leverage pure political pressure, seek a legislative path, or allow the deadline to pass without action remains the pivotal question for millions of consumers and a multi-billion dollar industry.
