bernard
THEE Realist
- Financial services stocks including Capital One, Synchrony, Citigroup, JPMorgan Chase and Bank of America slid in early trading on Monday.
- It follows U.S. President Donald Trump's call for a 10%, one-year cap on credit card interest rates.
- Trump made the call in a post on Truth Social on Friday, without outlining how such a move would play out.
Capital One shares dropped 6% in midday trading and Synchrony Financial tumbled more than 8%. Credit cards account for a large share of both banks' business models. Other banks that are more diversified saw smaller losses. Citigroup lost almost 4%, JPMorgan Chase and Bank of America fell 2%, as did Visa and Mastercard, credit card payments processors that don't put any of their capital at risk.
Other financial services names were caught in the downdraft. American Express slumped 4%, while Wells Fargo declined about 2%.
The proposed cap would come into force on Jan. 20, according to a post on Truth Social on Friday, though Trump didn't provide details on how it would work.
"Effective January 20, 2026, I, as President of the United States, am calling for a one year cap on Credit Card Interest Rates of 10%," Trump wrote, echoing a pledge he made in the 2024 presidential campaign.
"Please be informed that we will no longer let the American Public be 'ripped off' by Credit Card Companies," he added.
A cap would require approval from Congress. There has long been interest in curbing fees, and bipartisan bills to cap credit card interest rates at 10% have previously been introduced, highlighting potential appetite for the move.
When asked about his post, Trump said Sunday to reporters that if banks don't limit rates they would be "in violation of the law."