JPMorgan CEO Jamie Dimon has fired back at President Donald Trump's proposal to cap credit card interest rates, labeling it a "economic disaster" that could have far-reaching consequences for consumers and businesses alike.
In a surprising display of bipartisan support, Dimon's comments echo those made by progressive Senator Elizabeth Warren, who has also expressed willingness to work with the administration on the issue. However, banking industry trade group The Electronic Payments Coalition warns that implementing such a cap could lead to widespread credit card closures, reduced rewards for low-credit-score borrowers, and even impact municipal payments.
Dimon's assertion that capping interest rates at 10 percent would remove credit from 80% of Americans has sparked concerns about the potential economic fallout. "It would be an economic disaster," he said in Davos, Switzerland, where the comments were made. The CEO also argued that imposing such a cap without concrete implementation details could have unintended consequences for businesses and consumers.
Critics argue that the proposal may not yield the promised savings of $100 billion per year, as claimed by Vanderbilt University research. Instead, experts suggest that credit card companies would need to reduce rewards for low-credit-score borrowers, while limiting lending to those with scores below 600.
The bill, which also has support from Senator Bernie Sanders' team, faces slim chances in Congress due to opposition from Republican lawmakers and concerns about the impact on small businesses. "It's an opportunity for President Trump to point fingers at Congress," said Brian Jacobsen, chief economic strategist at Annex Wealth Management.
As markets react to Dimon's comments, some credit card stocks have seen a drop in value, while bank stocks are trending upwards. The interest rate cap push also coincides with growing disapproval of the president's handling of the US economy, according to recent polls.
In a surprising display of bipartisan support, Dimon's comments echo those made by progressive Senator Elizabeth Warren, who has also expressed willingness to work with the administration on the issue. However, banking industry trade group The Electronic Payments Coalition warns that implementing such a cap could lead to widespread credit card closures, reduced rewards for low-credit-score borrowers, and even impact municipal payments.
Dimon's assertion that capping interest rates at 10 percent would remove credit from 80% of Americans has sparked concerns about the potential economic fallout. "It would be an economic disaster," he said in Davos, Switzerland, where the comments were made. The CEO also argued that imposing such a cap without concrete implementation details could have unintended consequences for businesses and consumers.
Critics argue that the proposal may not yield the promised savings of $100 billion per year, as claimed by Vanderbilt University research. Instead, experts suggest that credit card companies would need to reduce rewards for low-credit-score borrowers, while limiting lending to those with scores below 600.
The bill, which also has support from Senator Bernie Sanders' team, faces slim chances in Congress due to opposition from Republican lawmakers and concerns about the impact on small businesses. "It's an opportunity for President Trump to point fingers at Congress," said Brian Jacobsen, chief economic strategist at Annex Wealth Management.
As markets react to Dimon's comments, some credit card stocks have seen a drop in value, while bank stocks are trending upwards. The interest rate cap push also coincides with growing disapproval of the president's handling of the US economy, according to recent polls.
. I mean, who wants credit taken away from 80% of Americans? 
It's not just about personal finance, it's also about the impact on businesses and consumers with lower credit scores 
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That would be a huge waste of resources. And what about the unintended consequences, like reduced rewards for low-credit-score borrowers or even municipal payment issues? 
. Let's have a calm and rational discussion about this instead of jumping to conclusions 
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It's like they think people are just going to magically get better credit scores and start borrowing money without any consequences? Newsflash: it doesn't work that way! I've got friends who are struggling to make ends meet, they can barely afford their rent let alone take on more debt. And what about all the small businesses that would have to shut down because they couldn't offer rewards programs or even process payments at all?! It's just not thought through, you know? The people who made that proposal clearly don't understand how credit works or who gets hurt when the economy starts to tank. I'm so tired of these politicians making promises they can't keep and then blaming everyone else for their failures 
... and if so, how do we strike that balance between consumer protection and business viability? 
I mean, I get where he's coming from, but isn't the goal to help people manage their debt and live more financially stable lives? It seems like they're more concerned with making bank off people who can't even pay their bills 
. And what about the $100 billion in savings that Trump is promising? Is that even realistic?
. I'm loving how Senator Warren is trying to find common ground with the admin tho 
... fingers crossed it doesn't end up in a Congressional showdown 
. Maybe we should think of other ways to regulate the industry instead of crippling it 
. I mean, think about all the small businesses that rely on credit card sales, they'd be screwed 
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. So yeah, Dimon might be being a bit harsh, but he's got a point 
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I don't get why anyone would want to mess with credit card rates. It's just basic economics - if you borrow money, you gotta pay back with some extra for the risk. 10% cap might sound good on paper but it's gonna cause more problems than it solves. 
, capping credit card interest rates at 10% is a total disaster waiting to happen 
and what really gets my goat is that nobody's even considering the potential impact on small businesses 
and it got me thinking... have you guys ever noticed how some cats are just meant to be experts at napping? Like, they can fall asleep anywhere, anytime! 
Meanwhile, humans are over here stressing about credit card interest rates 
I mean, wouldn't the world be a better place if everyone took a power nap every now and then? 
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. I've got a buddy who owns a small shop, and credit cards are how most customers pay 
. If they can't afford to offer decent interest rates, it's like they're gonna lose all their customers 
.
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i think its a bad idea, idk how u guys think it's gonna work out 
and bernie sanders is all about it too 