Jamie Dimon warns 10% credit card cap could cut off 80% of Americans from credit
TOI GLOBAL DESK | TOI GLOBAL | Jan 22, 2026, 18:54 IST
In a stark warning, JPMorgan CEO Jamie Dimon cautions against a proposed 10% cap on credit card interest rates by the Trump administration, predicting catastrophic economic consequences. He argues that such a move could effectively shut down credit availability for nearly 80% of Americans. The wider banking community echoes his sentiments, fearing restricted access to credit.
JPMorgan Chase CEO Jamie Dimon warned on Wednesday that a proposed 10% cap on credit card interest rates by the Trump administration would be economically disastrous, potentially cutting off credit for 80% of Americans. This warning comes as the banking industry pushes back against President Donald Trump's proposal, which aims to address cost-of-living concerns ahead of congressional elections. Dimon, a highly influential figure in Wall Street, made these remarks at the World Economic Forum in Davos, emphasizing that such a cap would impact everyday consumers' access to crucial credit.
The banking industry has strongly opposed the proposed cap, arguing it would significantly limit credit access for ordinary consumers. Wall Street analysts also believe that such a measure would necessitate legislation and has a low probability of passing due to divisions between Democrats and Republicans.
"It would remove credit from 80% of Americans, and that is their back-up credit," Dimon stated at the World Economic Forum in Davos.
Dimon suggested a trial run for the proposed cap.
"I think we should test it," Dimon said. "The government can do it, they should force all the banks to do it in two states - Vermont and Massachusetts - and see what happens."
While Dimon did not specify his reasoning for choosing Vermont and Massachusetts, his suggestion drew laughter from the audience. Notably, Senators Elizabeth Warren and Bernie Sanders, who represent Massachusetts and Vermont respectively, have previously advocated for legislation to cap credit card interest rates.
Dimon also highlighted the broader economic implications beyond credit card companies.
"People crying the most will not be the credit card companies. It will be the restaurants, retailers, travel companies, the schools, the municipalities, because people will miss their water payments, this payment and that payment," Dimon explained.
President Trump had called on companies to comply with the proposed cap by January 20 via a post on his Truth Social platform. This announcement reportedly blindsided the industry and caused bank stocks to decline as investors reacted to the potential disruption of a highly profitable business segment.
Credit cards are a significant source of revenue for banks. They charge high interest rates to offset the increased risk of default associated with unsecured card loans.
Major Wall Street banks are reportedly resisting some of Trump's proposals aimed at reducing the cost of living in the U.S. ahead of the mid-term elections. They are also suggesting alternative solutions to influence policy, according to Reuters, citing sources.
"We're going to give them at one point real analysis on the effects of this. We've given some but not a lot," Dimon commented.
In a post-earnings call last week, JPMorgan's Chief Financial Officer Jeremy Barnum addressed the possibility of legal action against rate caps.
"If you wind up with weakly supported directives to radically change our business that aren't justified, you have to assume everything is on the table," Barnum stated.
Analysts have suggested that credit card providers might offer concessions through innovative products. These could include lower rates for specific customer segments, basic cards with a 10% interest rate but no rewards, or reduced credit limits.
Dimon's sentiments were echoed by other prominent banking CEOs.
Citigroup CEO Jane Fraser, in an interview with CNBC from Davos, expressed her belief that Congress would not approve caps on credit card interest rates.
"The president is right in focusing on affordability," Fraser said. "But capping rates would not be good for the U.S. economy."
During a wide-ranging interview at Davos, Dimon also reaffirmed his earlier statements regarding the critical importance of the U.S. Federal Reserve's independence.
Global central bank chiefs and top Wall Street bank CEOs publicly supported Federal Reserve Chair Jerome Powell this month. This support came after the Trump administration had threatened him with a criminal indictment.
The proposal for a 10% cap on credit card interest rates was made by President Donald Trump earlier this month. He called for the cap without providing specific details on its implementation.
The banking industry bodies have voiced strong opposition to this move. They argue that it would restrict credit access for everyday consumers.
Wall Street analysts have indicated that such a measure would require legislative action. They also believe it has a low chance of passing due to disagreements between Democrats and Republicans.
The idea of testing the cap in two states was met with amusement by the audience at the World Economic Forum.
The Trump administration's proposal has created a stir in the financial sector. It has led to concerns about the potential impact on bank profitability.
Credit card loans are considered unsecured debt. This means banks charge higher interest rates to compensate for the increased risk of borrowers defaulting on their payments.
The banking industry is actively engaging in discussions and proposing alternatives to the administration's ideas. This effort aims to shape policy and mitigate potential negative impacts on the sector.
The potential for legal challenges has been raised by JPMorgan's Chief Financial Officer. This indicates the seriousness with which the industry views the proposed directives.
Analysts have proposed various strategies that credit card companies could adopt. These include offering tiered interest rates or simplified card products.
The views expressed by Jamie Dimon are consistent with those of other leaders in the banking industry. This suggests a unified front against the proposed rate cap.
Jane Fraser of Citigroup also commented on the affordability issue. She acknowledged the president's focus on this concern.
However, Fraser emphasized the potential negative consequences of rate caps on the broader U.S. economy.
Dimon's remarks at Davos also touched upon the role of the Federal Reserve. He stressed the importance of its autonomy.
The independence of the Federal Reserve is a cornerstone of monetary policy. Any perceived threat to this independence can have significant implications for financial markets.
The support for Federal Reserve Chair Jerome Powell from global financial leaders underscores the importance of central bank independence. This collective backing signals a commitment to maintaining stability in the financial system.
The Trump administration's threat of a criminal indictment against Powell was met with widespread criticism. It highlighted the tensions between the administration and the Federal Reserve.
The banking industry has strongly opposed the proposed cap, arguing it would significantly limit credit access for ordinary consumers. Wall Street analysts also believe that such a measure would necessitate legislation and has a low probability of passing due to divisions between Democrats and Republicans.
"It would remove credit from 80% of Americans, and that is their back-up credit," Dimon stated at the World Economic Forum in Davos.
Dimon suggested a trial run for the proposed cap.
"I think we should test it," Dimon said. "The government can do it, they should force all the banks to do it in two states - Vermont and Massachusetts - and see what happens."
While Dimon did not specify his reasoning for choosing Vermont and Massachusetts, his suggestion drew laughter from the audience. Notably, Senators Elizabeth Warren and Bernie Sanders, who represent Massachusetts and Vermont respectively, have previously advocated for legislation to cap credit card interest rates.
Dimon also highlighted the broader economic implications beyond credit card companies.
"People crying the most will not be the credit card companies. It will be the restaurants, retailers, travel companies, the schools, the municipalities, because people will miss their water payments, this payment and that payment," Dimon explained.
President Trump had called on companies to comply with the proposed cap by January 20 via a post on his Truth Social platform. This announcement reportedly blindsided the industry and caused bank stocks to decline as investors reacted to the potential disruption of a highly profitable business segment.
Credit cards are a significant source of revenue for banks. They charge high interest rates to offset the increased risk of default associated with unsecured card loans.
Major Wall Street banks are reportedly resisting some of Trump's proposals aimed at reducing the cost of living in the U.S. ahead of the mid-term elections. They are also suggesting alternative solutions to influence policy, according to Reuters, citing sources.
"We're going to give them at one point real analysis on the effects of this. We've given some but not a lot," Dimon commented.
In a post-earnings call last week, JPMorgan's Chief Financial Officer Jeremy Barnum addressed the possibility of legal action against rate caps.
"If you wind up with weakly supported directives to radically change our business that aren't justified, you have to assume everything is on the table," Barnum stated.
Analysts have suggested that credit card providers might offer concessions through innovative products. These could include lower rates for specific customer segments, basic cards with a 10% interest rate but no rewards, or reduced credit limits.
Dimon's sentiments were echoed by other prominent banking CEOs.
Citigroup CEO Jane Fraser, in an interview with CNBC from Davos, expressed her belief that Congress would not approve caps on credit card interest rates.
"The president is right in focusing on affordability," Fraser said. "But capping rates would not be good for the U.S. economy."
During a wide-ranging interview at Davos, Dimon also reaffirmed his earlier statements regarding the critical importance of the U.S. Federal Reserve's independence.
Global central bank chiefs and top Wall Street bank CEOs publicly supported Federal Reserve Chair Jerome Powell this month. This support came after the Trump administration had threatened him with a criminal indictment.
The proposal for a 10% cap on credit card interest rates was made by President Donald Trump earlier this month. He called for the cap without providing specific details on its implementation.
The banking industry bodies have voiced strong opposition to this move. They argue that it would restrict credit access for everyday consumers.
Wall Street analysts have indicated that such a measure would require legislative action. They also believe it has a low chance of passing due to disagreements between Democrats and Republicans.
The idea of testing the cap in two states was met with amusement by the audience at the World Economic Forum.
The Trump administration's proposal has created a stir in the financial sector. It has led to concerns about the potential impact on bank profitability.
Credit card loans are considered unsecured debt. This means banks charge higher interest rates to compensate for the increased risk of borrowers defaulting on their payments.
The banking industry is actively engaging in discussions and proposing alternatives to the administration's ideas. This effort aims to shape policy and mitigate potential negative impacts on the sector.
The potential for legal challenges has been raised by JPMorgan's Chief Financial Officer. This indicates the seriousness with which the industry views the proposed directives.
Analysts have proposed various strategies that credit card companies could adopt. These include offering tiered interest rates or simplified card products.
The views expressed by Jamie Dimon are consistent with those of other leaders in the banking industry. This suggests a unified front against the proposed rate cap.
Jane Fraser of Citigroup also commented on the affordability issue. She acknowledged the president's focus on this concern.
However, Fraser emphasized the potential negative consequences of rate caps on the broader U.S. economy.
Dimon's remarks at Davos also touched upon the role of the Federal Reserve. He stressed the importance of its autonomy.
The independence of the Federal Reserve is a cornerstone of monetary policy. Any perceived threat to this independence can have significant implications for financial markets.
The support for Federal Reserve Chair Jerome Powell from global financial leaders underscores the importance of central bank independence. This collective backing signals a commitment to maintaining stability in the financial system.
The Trump administration's threat of a criminal indictment against Powell was met with widespread criticism. It highlighted the tensions between the administration and the Federal Reserve.