As has been reported, Trump has called on Congress to pass a bill to place a cap on credit card interest rates at 10% for a period of 1 year. If passed, violators (banks that don’t comply) will forfeit all interest they have charged/collected on the debt and are enforceable by the Consumer Financial Protection Bureau and the Federal Trade Commission.
Jamie Dimon, CEO of JPMorgan, has criticized Trump’s plan as being disastrous for the US economy. Mainly the results of such a law would significantly reduce the availability of credit via cards to families that need it…as much as an 80% reduction of credit available to US consumers. And such a reduction would cascade down to retailers, restaurants, hotels etc. driving a further blow to the US economy.
Dimon suggested that it be tested on a limited basis in Vermont and Massachusetts, and see what happens.
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I tend to agree with Dimon, that while a cap on interest rates sounds good for consumers, the unintended consequences would be far worse than the status quo.
Its never going to get anywhere in congress, its a politicalploy at best. To much slush money at stake on both sides. But Trump will scream that the Dems killed his beautiful idea!
The same way that he complained that they won’t do anything to secure the border, when the Democrats tried to pass legislation under Biden to add funding to border security, and they refused to cooperate because Trump told them not to, and didn’t want Democrats to have the win. It’s just what they do.
I thought Republicans were supposed to be all about free markets. Credit card interest rates are determined by the free market. They reflect the fact that the most credit-worthy cardholders don’t pay any interest at all, and it’s the riskier ones that pay the fees.
I agree that this is political grandstanding that will go nowhere, and Trump will take the opportunity to blame the Democrats. Unless, due to increasing dementia, he just forgets the whole thing by tomorrow.
The most likely problem is folks with poor credit cannot get a card, and have to resort in even worse options like payday loans which have sometimes triple digit effective interest rates.