WASHINGTON (dpa-AFX) - JPMorgan Chase CEO Jamie Dimon has voiced strong concerns over President Donald Trump's suggestion to cap credit card interest rates at 10 percent.
Dimon warned that such a move would significantly restrict access to credit and negatively impact substantial parts of the U.S. economy.
During his speech at the World Economic Forum in Davos, Dimon labeled the idea an 'economic disaster,' though he acknowledged that major banks like JPMorgan (JPM) would likely withstand the changes.
Earlier this month, Trump proposed a one-year cap on credit card rates starting January 20, asserting that Americans are being overcharged by lenders. However, the plan has not yet been implemented, and there are still questions about its enforcement.
According to Dimon, a 10% cap would be 'drastic' and could potentially cut off backup credit for around 80% of Americans. He cautioned that the consequences would ripple beyond the banking industry, affecting restaurants, retailers, travel companies, schools, and municipalities, as consumers would struggle to manage their daily expenses.
Banking industry groups have echoed these concerns, suggesting that lenders might respond by reducing credit limits, closing high-risk accounts, and cutting back on rewards programs. They also warned that consumers might be driven toward less regulated and more costly options.
Despite the industry pushback, Trump has stood by his proposal, arguing that credit card companies 'make a lot of money' and should offer some relief to consumers.
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