Davos: JPMorgan Chase Chief Executive Jamie Dimon warned that a proposed cap on U.S. credit card interest rates would trigger an “economic disaster,” sharply criticizing President Donald Trump’s call for Congress to impose a 10% ceiling for one year as part of a consumer cost relief push aired at the World Economic Forum.
Trump used his Davos appearance and related comments to press lawmakers to enact a temporary cap, arguing that credit card rates can run into the high 20% to low 30% range and that limiting borrowing costs would help households save, including for a housing down payment. The White House proposal has intensified a debate that pits consumer affordability concerns against banking industry arguments that a rigid cap would shrink access to credit.
Dimon said a blanket limit would push lenders to cut back dramatically on revolving credit, contending it would remove access for a broad share of card users who rely on their cards as backup liquidity. He said risk based pricing is central to how unsecured credit is extended, and that compressing interest revenue to a fixed ceiling would make many accounts uneconomic, especially among borrowers viewed as higher risk.
Banking and card industry groups have also opposed the idea, warning that a mandated cap could lead to tighter underwriting, reduced credit lines, fewer card offers, and the curtailment of rewards and other card features that are funded by interest and fees. The prospect of legislative action also weighed on bank shares during the session in which the proposal drew heightened attention in global markets.
Credit cap proposal draws political heat
Trump’s push would require congressional legislation, and it has attracted both support and skepticism on Capitol Hill. Democratic Senator Elizabeth Warren has backed the concept of legislating an interest rate cap, dismissing industry warnings that borrowers would be harmed by reduced credit availability. Trump’s Republican Party currently holds majorities in both the Senate and the House of Representatives, giving his proposal a clearer procedural path than in a divided Congress even as its details remain contested.
Dimon’s remarks landed as U.S. households face elevated borrowing costs on revolving debt, and as policymakers and consumer advocates focus on how interest charges compound balances for cardholders who carry debt month to month. The banking industry’s central rebuttal is that cards are unsecured loans, defaults can rise quickly in downturns, and lenders price that risk into annual percentage rates and credit limits.
Dimon also proposed a narrower test as an alternative to an immediate nationwide mandate, suggesting a pilot in two states, Vermont and Massachusetts, whose senators have supported interest rate caps in the past. His suggestion was framed as a way to measure second order effects on lending and consumer access before applying a uniform national rule.
Banks cite credit access risks
Trump added fuel to the dispute in a televised interview, saying he had received calls from credit card companies and urging the industry to “give people a break” while repeating his support for the 10% cap. Trump did not identify the companies involved, and his comments came despite longstanding, on-the-record opposition to rate caps from major card issuers and banking groups.
For banks and issuers, the policy fight now centers on whether lawmakers will pursue a statutory rate ceiling and how it would be structured, including whether it would apply across all products and borrower categories. Dimon’s comments underscored the industry’s position that a fixed cap would force widespread retrenchment in credit availability, while Trump’s remarks put the onus on Congress to act on the proposal.