Trump: Credit Card Limits Must Be Approved by Congress

Summary

Following his proposal to cap credit card interest rates at 10% for one year to alleviate living cost pressures, President Trump has now stated he will ask Congress to approve the measure through legislation. This initiative, aimed at helping Americans save for home purchases, has faced strong opposition from the banking industry, which warns it could severely restrict credit access for millions of consumers.Stheadline The move to involve Congress follows earlier considerations of an executive order and shifts the proposal into a legislative process, which analysts had previously noted would be required for such a cap.Sina Finance

Impact Analysis

So he’s basically admitting he can’t ram this through with an executive order. This is a significant de-escalation. The market was pricing in a non-zero probability of a chaotic, unilateral rate cap that would have crushed bank earnings.InfoCast By punting this to Congress, he’s moving it from an immediate threat to a protracted legislative slog that it’s unlikely to survive, especially given the fierce banking lobby opposition.Stheadline

This is classic political theater. He gets to look like a populist hero fighting high interest rates for voters ahead of elections,Zhitong but shelves the actual economic fallout. For us, this takes the primary tail risk off the table for credit card issuers like Capital One, Discover, and the big banks. The overhang that’s been pressuring these stocks just dissipated. It’s a clear signal to get back into financials that were beaten down by this headline risk. The bear case just got deferred indefinitely.