President Donald Trump said a couple of weeks ago he’d be signing an executive order limiting credit card interest to 10%.
After getting pushback from some of the country’s biggest banks and credit card companies, Trump has pivoted, using his speech at the World Economic Forum to say he’ll seek help from Congress to get it done.
“I’m asking Congress to cap credit card interest rates at 10% for one year and this will help millions of Americans save for a home,” Trump said in his speech in Davos, Switzerland.
It’s a different tack than he took earlier this month, when posted on social media that he would call for a one-year cap. That sent the financial industry racing to figure out how to respond with little clarity on how Trump would implement the policy.
Bank executives have fought back against the policy. According to a report from The Associated Press, JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon said before Trump’s speech the move would spell “economic disaster” for the U.S., causing many lenders to pull credit lines for consumers.
Trump’s comments on Wednesday “felt like a dialing down of the substance even if the style was pure Trump,” Brian Jacobsen, chief economic strategist at Annex Wealth Management, told the AP. “He didn’t say he’d cap credit card rates, instead asking Congress to do it.”
Such a measure would require widespread congressional support, according to the AP report. Last week, Senate Majority Leader John Thune said capping the rates “would probably deprive an awful lot of people of access to credit around the country.” House Speaker Mike Johnson, a Republican from Louisiana, said it would “take work to resolve differences” over the proposal.
In an appearance on CNBC Tuesday, Citigroup Inc. CEO Jane Fraser said she doesn’t think there’s a realistic chance of bipartisan support for a credit card cap in Congress.
