Banking On Banks

The stock prices of banks and credit card companies fell today after President Donald Trump announced late Friday that credit card companies would be subject to a 10% cap on the interest rates they can charge customers. The President proposed a one-year cap on interest rates starting January 20. The Trump administration is scrambling to address the affordability crisis before this year's midterm elections.

We expect that the banking industry will pop this trial balloon before it takes off. The industry's trade groups issued a joint statement late Friday, making their case: "Evidence shows that a 10% interest rate cap would reduce credit availability and be devastating for millions of American families and small business owners who rely on and value their credit cards, the very consumers this proposal intends to help."