"Trump's proposed one-year cap on credit card interest rates sent shockwaves through financial markets last week, triggering immediate price declines across major banks and card issuer stocks."
"If this is enacted-and that's a big if, though part of me hopes it is-we would likely see a significant contraction in industry credit card lending. Credit card issuers simply won't be able to sustain profitability at a 10% rate cap,"
"In my opinion, [it's] a very thoughtful and good suggestion from Trump to cut it to 10%. It would have returned maybe $20 billion of that back to US consumers. It's not uncommon. We've seen interest rate regulation in Europe work pretty well."
"On face value, the interest rate caps seem to combat mounting credit card debt, however, it may end up negatively impacting credit availability, specifically for those who need it most: SMBs and less affluent consumers."
Trump proposed a one-year cap on credit card interest rates, prompting immediate price declines across major banks and card issuers. The proposal remains unenacted but could quickly reduce profitability for banks and card issuers if implemented. Fintech CEOs publicly supported a 10% cap, suggesting it would return funds to consumers and pointing to European regulation as precedent. A 10% cap would likely contract credit card lending and reduce credit availability, disproportionately affecting SMBs and less affluent consumers. Fintech firms anticipate that constrained bank lending will push underserved consumers toward fintech lenders, creating strategic product and growth opportunities.
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