JPMorgan Chase (JPM) CEO Jamie Dimon warned Wednesday that a proposed Trump plan to cap credit-card interest rates at 10% could choke off credit access for most Americans.
Earlier in the month, U.S. President Donald Trump called for a one-year cap on credit card rates at 10%, effective Jan. 20, noting that he will not allow Americans to be “ripped off” by credit card firms whose credit card interest rates have reached 20% – 30% or more.
But such a cap “would remove credit from 80% of Americans, and that is their back-up credit,” Dimon said at the World Economic Forum in Davos. “People crying the most will not be the credit card companies; it will be the restaurants, retailers, travel companies, the schools, the municipalities,” he added.
Wall Street is widely skeptical that a rate cap will succeed, as numerous previous efforts have failed. Lawmakers have repeatedly tried to cap interest rates federally, since the Supreme Court rejected state-level credit card rate caps in 1978, according to Morgan Stanley analyst Jeffrey Adelson.
During JPMorgan Chase’s (JPM) earnings call, Chief Financial Officer Jeremy Barnum said “everything is on the table” in its efforts to push back against the rate cap.