U.S. Banks Navigate Trump's Bold Proposal on Credit Card Interest Caps

U.S. banks are in a dilemma after President Trump proposed capping credit card interest rates at 10%. The lack of clear guidance from the White House leaves banks unsure of compliance requirements. The financial sector is caught in a political test, considering new product offerings with lower rates.

U.S. banks faced a political and operational challenge after President Donald Trump called for a cap on credit card interest rates at 10%, leaving the financial industry scrambling. Banks warned this move could limit consumer credit access while the White House has not specified how this cap would be executed.

Analysts indicate that implementing such a rate cap would require congressional legislation, a measure that has failed before. Despite this, White House economic adviser Kevin Hassett suggested 'Trump cards' could be introduced voluntarily by banks. Sources indicate banks are exploring ways to compromise via new product offerings.

As Tuesday approaches without regulatory guidance, U.S. banks face uncertainty. Discussions with the administration continue as financial entities evaluate potential solutions like lowering interest rates on selective cards. Trump's proposal reflects an attempt to address voter concerns ahead of the elections, adding a layer of complexity to ongoing industry-government dialogues.

(With inputs from agencies.)