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US Banks Warn Rate Cap Could Harm Consumers, Economy
19 Feb
Summary
- Bank leaders express concern over potential negative impacts of a rate cap.
- A 10% rate cap could slow consumer spending and credit availability.
- Some banks are exploring new credit card products with a 10% rate.
Leading US financial institutions are expressing grave concerns about the potential economic fallout from a proposed 10% interest rate cap. JPMorgan Chase CFO Jeremy Barnum explicitly stated during an earnings call that such a cap would be "very bad for consumers" and "very bad for the economy," signaling a strong stance against what he called "weakly supported directives to radically change our business."
Bank of America CEO Brian Moynihan echoed these sentiments, predicting that a 10% cap would decelerate consumer spending. He confirmed that the bank has been actively engaging with the administration to find solutions. Similarly, Wells Fargo CFO Mike Santomassimo warned that the cap would "remove credit at a really important time from the people that most need it," leading to negative consequences for both credit availability and overall economic growth.
Analysts project a slowdown in consumer loan growth during 2026, following a period of acceleration. North American banks are anticipating slower lending growth, tariff uncertainties, and shifting credit conditions heading into the new year. In response, Bank of America and Citigroup are reportedly considering introducing new credit card products featuring a 10% rate, potentially as a gesture to address the White House's concerns.
