Banks Bet on Defying Price Controls
Mark Mason, CEO of Citi Private Bank, speaks during the Global Wealth Management Summit in New York June 17, 2014.
Shannon Stapleton | Reuters
The biggest U.S. banks show no sign of capitulating to President Donald Trump’s mandate to slash credit card interest rates, setting up a confrontation just as the President is expected to take the world stage next week at Davos.
Executives at JPMorgan Chase and Citigroup warned this week that rather than offering cards at a 10% interest rate, as Trump has directed should happen by Jan. 20, the banks would simply close many customers’ accounts.
“An interest rate cap is not something that we would or could support,” Citigroup CFO Mark Mason told reporters on Wednesday.
It would “restrict access to credit to those who need it the most and frankly would have a deleterious impact on the economy,” he said.
On Tuesday, JPMorgan CFO Jeremy Barnum indicated that the industry could defend itself in the courts if needed, saying “everything’s on the table” in terms of a response.
Trump, keen to address voters’ concerns over affordability ahead of midterm elections this year, began his broadside against banks in a late Friday social media post by alleging that the industry was ripping off credit card borrowers. In media interviews and follow up posts, Trump has doubled down on his push and endorsed a separate bill that takes aim at the swipe fees paid by merchants.
But five