Key Points
- JPMorgan Chase CEO Jamie Dimon called President Trump’s proposed 10% cap on credit card interest rates an “economic disaster.”
- He warned that the cap would cut off credit for 80% of Americans.
- Dimon said the move would hurt small businesses and municipalities the most.
- He suggested testing the cap in a couple of liberal states to see the negative effects.
JPMorgan Chase CEO Jamie Dimon had some harsh words for President Trump on Wednesday, calling his proposal for a 10% cap on credit card interest rates an “economic disaster.” Speaking at the World Economic Forum in Davos, Dimon, who was otherwise measured in his criticism of the president, did not hold back on this issue.
Trump has been pushing for a one-year, 10% cap on credit card rates, arguing that the American public is being “ripped off.” But Dimon warned that such a move would have devastating consequences for the U.S. economy.
“We (JPMorgan Chase) would survive it,” he said. “(But) it would remove credit from 80% of Americans. And that is their backup credit.”
Dimon argued that if banks can’t charge a rate that reflects the risk of lending to certain customers, they simply won’t lend to them. This would cut off a vital financial lifeline for millions of people, especially those who need it for emergencies.
“The people crying the most won’t be the credit card companies,” he predicted. “It’ll be the restaurants, the retailers, the travel companies… because people will miss their water payments and this payment and that payment.”
Dimon also suggested that if the cap were tested, it should be done in a couple of states represented by more liberal senators, such as Vermont and Massachusetts. He said the political left “would learn a real lesson” from such an experiment.
While Dimon doesn’t think a nationwide cap will ever pass Congress, his strong words are a clear signal to the White House that the banking industry is ready to fight this proposal tooth and nail.
