Donald Trump's credit card interest rate cap proposal would cut off credit for 80 per cent of Americans, warns JPMorgan Chase CEO Jamie Dimon

JPMorgan Chase CEO Jamie Dimon has warned that the credit card interest rate cap proposal from the Trump administration would cut off credit for 80 per cent of Americans. The U.S. banking giant JPMorgan Chase chief also warned ⁠on Wednesday that the Trump administration's proposed 10 per cent cap on credit card interest rates would spell economic disaster.

President Donald Trump, under pressure to address voters' cost-of-living concerns ahead of this year's congressional elections, called for the cap earlier this month, without detailing how the plan would be implemented. "It would remove credit from 80 per cent ‌of Americans, and that ‌is their back-up credit," Dimon, longtime chief of JPMorgan and Wall Street's most influential banker, said at the World Economic Forum in Davos.

Last week, JPMorgan's Chief Financial Officer Jeremy Barnum was asked in a post-earnings call if the company would pursue legal action against rate caps. "If you wind up with weakly supported directives to ‍radically change our business ⁠that aren't justified, you have to assume ⁠everything ⁠is on the table," he said.


Analysts have said card providers could make conciliatory gestures with innovative offerings such as lower rates for certain customers, no-frills cards that could charge 10 per cent but have no rewards, or lower credit limits.

Dimon's remarks echoed the views of other top banking CEOs.

In an interview with CNBC from Davos, Citigroup CEO Jane Fraser said earlier this week she does not expect Congress to approve caps on credit card interest rates. "The president is right in focusing on affordability," Fraser said. "But capping rates would not be good for the U.S. economy," Fraser said.

In the wide-ranging interview at Davos, Dimon also reiterated his earlier remarks and said that the independence of the U.S. Federal Reserve was critical.

Global central bank chiefs and top Wall Street bank CEOs lined up ​in support of Federal Reserve Chair Jerome Powell this month after the Trump administration threatened him with a criminal indictment.

FAQs

Q1. Who is JPMorgan Chase CEO?

A1. JPMorgan Chase CEO is Jamie Dimon.

Q2. What is Trump administration's proposal on credit card interest rate cap?

A2. Trump administration has proposed a 10 per cent cap on credit card interest rate.