Trump's credit card rate cap would be 'disaster': JPMorgan CEO
What's the story
Jamie Dimon, the CEO of JPMorgan Chase, has warned that President Donald Trump's proposal to cap credit card interest rates at 10% would be an "economic disaster." The warning came during a discussion at the World Economic Forum (WEF) in Davos. Dimon said such a drastic move would cut access to credit for up to 80% of Americans and have far-reaching effects on various sectors including restaurants, retailers, travel firms, and schools.
Plan critique
Dimon challenges Trump's credit card rate cap plan
Responding to Trump's plan, which was announced earlier this month, Dimon said, "It would be an economic disaster." He added that if the president were to go ahead with such a measure, it should first be tested in Vermont and Massachusetts. These states are represented by Senators Bernie Sanders and Elizabeth Warren who have both supported similar caps.
Industry response
Trump's stance on credit card companies
Trump has defended his proposal, saying he respects credit card companies but believes they make enough money and should give people a break. US banking associations have warned that capping interest rates could limit access to credit for many Americans and be "devastating" for millions of families and small businesses. The average interest rate for credit cards in the US is about 20%.
Market impact
Banking industry reacts to Trump's proposal
The banking industry has reacted strongly against Trump's proposal. Major Wall Street banks are pushing back on some of his ideas for reducing the US cost of living ahead of mid-term elections. They are also suggesting alternatives in a bid to shape policy. Citigroup CEO Jane Fraser said she doesn't expect Congress to approve caps on credit card interest rates, echoing Dimon's sentiments.