Jamie Dimon Warns Trump’s Credit Cap Would Lead To ‘Economic Disaster’

Associated Press

JPMorgan Chase CEO Jamie Dimon warned that President Donald Trump’s proposed interest cap on credit card rates would lead to “economic disaster” for everyday Americans.

Earlier this month, Trump demanded a one-year 10% cap on credit card interest rates to help Americans with “affordability.”

“Please be informed that we will no longer let the American Public be ‘ripped off’ by Credit Card Companies that are charging Interest Rates of 20 to 30%, and even more, which festered unimpeded during the Sleepy Joe Biden Administration,” Trump wrote on Truth Social, adding “AFFORDABILITY!”

At the World Economic Forum in Davos, Switzerland, Trump confirmed that he planned to ask Congress to pass the cap on credit card interest rates. But Dimon was skeptical that Congress would ever pass a nationwide cap. Trump reached out to Sen. Elizabeth Warren (D-MA) last week on the issue in an apparent offer to team up on the effort.

“It would be an economic disaster,” Dimon warned at Wednesday’s session. “In the worst case, you would have to have a drastic reduction of the credit card business.”

“The people crying the most won’t be the credit card companies,” Dimon continued. “It’ll be the restaurants, the retailers, the travel companies, the schools, the municipalities, because people will miss their water payments and this payment and that payment. It would be something else to watch.”

“We would survive it, by the way,” Dimon said of JP Morgan Chase, the largest bank in the U.S. “(But) it would remove credit from 80% of Americans. And that is their backup credit.”

Other notable voices agreed with Dimon.

University of Michigan economics professor Justin Wolfers told CNN Wednesday, “If you cap the rate at 10%, banks will find it unprofitable, and a bunch of people won’t get credit cards.”

Economist Stephen Moore, who served as one of Trump’s senior economic advisors, wrote on social media shortly after Trump’s announcement, “Price controls on credit cards NEVER work. Nixon and Carter tried, it was a disaster. Capping rates at 10% may sound popular, but it risks cutting access to credit for millions of Americans who rely on it for emergencies.”

And columnist Charles C.W. Cooke with the conservative outlet National Review wrote that Trump’s proposed policy would be a disaster for Republicans in the midterm elections.

Trump’s policy “would provoke a populist backlash on a scale that we have not seen in the United States for a while,” Cooke wrote.

“The result of this would not be some lofty 10-percent-for-everyone paradise, but an extremely selective universe in which only the most secure candidates were accepted.” As a result, he wrote, “most new applicants would be turned down, longstanding credit limits would be lowered, and existing customers who exhibited even a modest pattern of delinquency would have their accounts canceled on the spot.”

New: The Mediaite One-Sheet "Newsletter of Newsletters"
Your daily summary and analysis of what the many, many media newsletters are saying and reporting. Subscribe now!