As Trump's deadline for a cap on credit card rates looms, banks have only questions and no answers

NEW YORK (AP) — President Donald Trump a week ago told the credit card industry it had until Jan. 20 to comply with his demand for a 10% cap on interest rates. With just days to go, consumer groups, politicians, and bankers alike remain unclear on what the White House has planned and whether Trump even remains serious about the idea.

So far, the White House has not provided any detail about what will happen to credit card companies that don’t lower card rates. White House Press Secretary Karoline Leavitt said the president has “an expectation” that credit card companies will accede to his demand that they cap interest rates on credit cards at 10%.

“I don’t have a specific consequence to outline for you but certainly this is an expectation and frankly a demand that the president has made,” she said Friday.

A researcher who studied Trump’s proposal when Trump first floated it during the 2024 presidential campaign found that Americans would save roughly $100 billion in interest a year if credit card rates were capped at 10%. The same researchers found that while the credit card industry would take a major hit, it would still be profitable, although credit card rewards and other perks might be scaled back. The administration has amplified that research, posting it on one of the White House’s official Twitter pages.

Bank lobbyists, many who have been spending much of the past week scrambling to figure out what the White House has planned for their industry, have been left in the dark. There have been bills introduced into both houses of Congress by both Republicans and Democrats this year and years past, but House and Senate Republican leadership have been cold to the idea of passing a law capping interest rates.

The Dodd-Frank Act, the law passed after the 2008 financial crisis that overhauled the financial industry, explicitly prohibits at least one federal bank regulator from setting usury limits on loans.

Without a law or executive order, it may simply come down to Trump using political pressure to force the credit card industry to do what he wants, as he’s done with other industries. For example, Trump demanded that pharmaceutical companies cut drug prices, which resulted in some pledges by drug industry CEOs to do what he asked. Trump also demanded chip makers and tech companies move production to the U.S., which also resulted in companies like Apple committing to build more manufacturing capacity domestically.

Wall Street has little interest in an all-out war with the White House, especially as banks have benefitted from the industry-friendly, deregulatory agenda that Trump administration has provided so far. The One Big Beautiful Bill, signed in to law in July, pushed another significant round of tax cuts. And deregulation pushed companies to embrace dealmaking last year, which led to a steady stream of investment banking revenues and fees to the big banks.

When it comes to credit card rates, the messaging out of the bank lobbying groups and bank executives has been two-fold: They have pushed back on the cap but in the same breath have offered to work with the White House.

In a call with reporters on Tuesday, JPMorgan’s Chief Financial Officer Jeffrey Barnum indicated the industry was willing to fight with all resources at its disposal to stop the Trump administration from capping those rates. JPMorgan is one of the nation’s biggest credit card companies. Its customers collectively holding $239.4 billion in balances with the bank, and it has major co-brand partnerships with companies such as United Airlines and Amazon. JPMorgan also recently acquired the Apple Card credit card portfolio from Goldman Sachs.

Mark Mason, Citigroup’s chief financial officer, told reporters on Wednesday that a cap “is not something we could or would support,” saying it would restrict credit to consumers and harm the economy. But at the same time, Mason said, “Affordability is a big issue, and we look forward to collaborating with the administration on ways we can address this.”

Trump took further aim at the card industry when he endorsed a bill in Congress that could negatively impact the amount of money banks earn from merchants every time a customer swipes their card.

Not all companies are waiting for Trump's next move.

Fintech company Bilt launched a new set of credit cards this week and said it would cap customers’ interest rates at 10% on new purchases for a year. While effectively a promotional rate that other credit card companies have used in the past, Bilt’s move could provide an example of how the credit card industry can meet the White House's demands without fundamentally destroying their business model.

“If (a credit card rate cap) is going to happen, we’d rather be at the forefront,” Ankur Jain, Bilt’s CEO, said in an interview earlier this week.