"JPMorgan CEO Dimon said that Trump's push to cap rates at 10 percent would result in consumers losing access to credit. JPMorgan Chase CEO Jamie Dimon pushed back on calls by the administration of United States President Donald Trump to cap credit card interest rates, claiming that if Congress follows through, it would result in an economic disaster. Dimon made his comments on Wednesday at the World Economic Forum in Davos, Switzerland."
"Trump has proposed capping interest rates on credit cards at 10 percent for a year and has called on Congress to pass legislation to require it, but he has fallen short of outlining a concrete plan for how the cap would be implemented. It would remove credit from 80 percent of Americans, and that is their back-up credit, Dimon said on Wednesday, as Trump renewed calls for the cap."
"Banking industry trade group The Electronic Payments Coalition claims that if the interest rate cap is imposed, credit cards for those with credit scores below 740, which account for as much as 88 percent of credit card holders, could be closed or restricted. Credit card companies would need to reduce rewards for those with FICO scores below 760, and would only need to restrict lending to those with credit scores below 600."
A proposal to cap credit-card interest at 10 percent for a year would remove backup credit for roughly 80 percent of Americans and could lead to widespread card closures or restrictions. Industry analysis indicates most cardholders with credit scores below 740 could lose access, while issuers would likely cut rewards for those below FICO 760 and restrict lending to borrowers below 600. A Vanderbilt University report estimates such a cap would save borrowers about $100 billion annually. Rising credit-card debt has been identified as a major barrier to saving for home down payments. The proposal has attracted rare bipartisan interest.
Read at www.aljazeera.com
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