Overview
- Top executives from JPMorgan, Bank of America, Citigroup and Wells Fargo said a 10% ceiling would sharply restrict access to credit and risk broader economic fallout during their earnings calls.
- Analysts cautioned the roughly $70 billion market for credit-card asset-backed securities could face shrinking excess spread and potential early amortization, with nonprime portfolios most vulnerable.
- A coalition of major banking trade groups warned the cap would reduce credit availability and harm millions of households and small businesses that rely on cards.
- Average card APRs hover around 20% to 22%, and while the president called for a Jan. 20 start to a one-year cap, experts note any binding measure would need Congress or the CFPB, where bipartisan bills have previously sought a 10% limit.
- Some private-sector responses are emerging, including fintech offerings of 10% APR cards for a year, and analysts say issuers would likely cut rewards, raise fees, and tighten underwriting if a cap were imposed.