A sign at the entrance to a Capital One bank branch in Manhattan.
Eric McGregor | Light Rocket | Getty Images
Banks and financial services stocks fell on Monday after President Donald Trump called for a one-year cap on credit card interest rates of 10%.
capital one Shares were down 6% in midday trading. synchrony financial It fell more than 8%. Credit cards account for a large share of both banks’ business models. Other, more diversified banks had smaller losses. citygroup Although it decreased by nearly 4%, JP Morgan Chase and bank of america fell 2% visa and master carda credit card payment processor that doesn’t put any capital at risk.
Other financial services names were also caught in the downdraft. american express While the decline was 4%, wells fargo It decreased by about 2%.
The proposed cap would go into effect on January 20, according to a post on Truth Social on Friday, but President Trump did not provide details on how it would work.
“Effective January 20, 2026, as President of the United States, I demand a one-year cap on credit card interest rates of 10%,” President Trump wrote, repeating his 2024 presidential campaign promise.
“Please let us know that we will no longer allow Americans to be ‘ripped off’ by credit card companies,” he added.
The cap would require parliamentary approval. There has been a long-standing interest in curbing fees, and bipartisan legislation to cap credit card interest rates at 10% has been introduced previously, highlighting potential appetite for this move.
Asked about his post on Sunday, President Trump told reporters it would be “against the law” if banks didn’t cap interest rates.
Critics said over the weekend that Trump’s plan, if enacted, would cause banks to cut back on lending, cause many consumers to lose credit and curb consumer spending, which accounts for about two-thirds of all economic activity.
Banking industry officials say the White House’s proposal will have an unexpected impact on consumers and the U.S. economy.
The move will make a significant portion of the credit card industry unprofitable, especially those related to customers with less-than-ideal credit profiles, banks and analysts said. Rather than offering unprofitable products to consumers, the industry will stop providing access to customers with subprime credit and make other changes to card programs, including reducing benefits, the people said.
They say consumers will cut back on spending or rely on other forms of unsecured debt.
Pay now, pay later stocks rose in early trading on the belief that more consumers would be forced to use these financial institutions as banks withdraw credit, but quickly gave back their gains after the market officially opened.
Affirm Holdings After rising in pre-market trading, it fell more than 6%, paypal It fell about 1%.
—CNBC’s Hew Song contributed reporting
