JP Morgan’s Jamie Dimon warns of ‘economic disaster’ after Trump calls for 10% cap on credit card interest rate

JPMorgan Chase CEO Jamie Dimon on Wednesday (21 January) warned that US President Donald Trump’s proposed 10% cap on credit card interest rates would be an “economic disaster,” saying it would shut millions of Americans out of the credit system.

Speaking at the World Economic Forum (WEF) in Davos, the head of the largest US bank said the proposal would make unsecured lending unviable.

“Eighty per cent of Americans will lose access to credit if this moves forward,” Dimon said.

Follow Davos 2026 Visit LIVE Updates here

The Trump administration has argued the cap would improve affordability for everyday consumers.

Dimon said the fallout would ripple across the economy, far beyond banks.

“People crying the most will not be the credit card companies, it will be the restaurants, retailers, travel companies, the schools, the municipalities,” he said.

Trump called for a cap on credit card interest rates earlier this month without detailing how it would be implemented.

Banks prepared to fight rate cap

JPMorgan Chief Financial Officer Jeffrey Barnum said earlier this month that the industry was prepared to strongly resist the proposal.

In a call with reporters on 13 January, Barnum said banks were willing to fight “with all resources at their disposal” to stop the Trump administration from capping credit card interest rates.

Kedia warns of “crushing” impact on clients

US Bancorp CEO Gunjan Kedia on 20 January warned that a blanket 10% cap would significantly hurt consumers, small businesses and the broader economy.

“Our estimate is that 90-plus per cent of our clients will see a detrimental impact if there was an across-the-board 10% rate cap on credit cards,” Kedia told analysts.

He added, “The impact on 50% of the clients will be crushing, as it will be for the economy.”

Kedia said the proposal would be “very costly for many small merchants” and would not achieve its stated goal.

“It will not achieve the goal intended,” she said.

She added that the bank is exploring ways to improve financial education so customers are better informed about available options.

“We have observed that just in the last few days, the conversation around the rate cap has shifted more productively,” Kedia said.

Citi, industry groups oppose cap

Citigroup Chief Financial Officer Mark Mason told reporters earlier that a rate cap was not something the bank could support.

“A cap is not something we could or would support,” Mason said, adding it would restrict credit and harm the economy.

“Affordability is a big issue, and we look forward to collaborating with the administration on ways we can address this.”

Interest income — a major profit engine for banks — would take a substantial hit if the proposal is implemented in its current form, industry experts told Reuters.

The American Bankers Association said on Tuesday that at least 137 million cardholders, and as many as 159 million, would no longer be able to use their cards if the rate cap were imposed, citing new data from issuers, according to Reuters.

A survey by the Consumer Bankers Association found that six in 10 US adults expect a rate cap would lead banks to add fees and reduce overall credit card approvals, Reuters reported.

Analysts see scope for compromise

Analysts said card providers could respond with alternative offerings, including lower-rate cards for certain customers, no-frills cards charging 10% without rewards, or lower credit limits, Reuters reported.

“We believe there is a political compromise in the works to ensure the President does not push Congress to enact a 10% cap on credit card interest rates,” TD Cowen analysts said in a note.

Trump last week told the credit card industry it had until 20 January to comply with his demand for a one-year cap at 10%. He later said companies that ignored the demand would be “in violation of the law.”

The White House has yet to outline enforcement measures. Press Secretary Karoline Leavitt said the president expects compliance. “I don’t have a specific consequence to outline for you, but certainly this is an expectation and frankly a demand that the president has made,” Leavitt said.