Bank of America Weighs 10%‑APR Card as Trump’s Unenforced Rate Cap Faces Legal Doubts
Bank of America is reportedly weighing a new credit card that would carry a 10% APR after President Trump urged a one‑year 10% cap to take effect Jan. 20, but banks have largely left rates unchanged amid no statute, regulation or clear enforcement mechanism and legal experts and the CFPB say it’s unclear a president can unilaterally impose such a limit. Economists and industry groups say a hard cap could save consumers tens to hundreds of billions annually (Vanderbilt estimates about $100 billion) yet would slash bank revenue, prompt credit‑line cuts or higher‑cost alternatives, and has drawn sharp pushback from Wall Street even as some lawmakers and fintechs move to align with the proposal.
📌 Key Facts
- President Trump publicly called for a 10% APR cap on credit cards to take effect Jan. 20, 2026, saying card issuers would be breaking the law if they did not comply — but he did not specify whether he would seek legislation, issue an executive order or use another enforcement mechanism.
- There is currently no statute, regulation or executive order that imposes a 10% federal rate cap (the CFPB says there is no general federal rate cap); as of the Jan. 20 deadline most banks and card issuers had left APRs largely unchanged and the White House offered no clear enforcement details, leaving bank lobbyists and issuers 'in the dark.'
- Bank of America is reportedly considering launching a new credit card that would comply with a one‑year 10% APR cap; some fintechs (e.g., Bilt) have already rolled out cards offering 10% APR for a year, while existing BankAmericard terms typically move from 0% introductory offers to 14.5%–24% ongoing APRs.
- Average credit‑card APRs are far above 10% — Federal Reserve data reported about 22.3% in November 2025 (other measures put year‑end December 2025 around 19.7% and LendingTree near 24%) — a rise tied to higher Fed policy rates and worsening delinquencies; U.S. credit‑card balances hit a record $1.2 trillion in Q3 2025 with average balances near $7,900.
- Wall Street and the industry pushed back: shares of major card issuers dropped sharply on the threat of a cap; CEOs and trade groups warned that political interference (and even DOJ moves targeting the Fed) could undermine markets, and bank executives including JPMorgan signaled they were prepared to 'fight with all resources' against a one‑year 10% cap.
- Research and analyst estimates highlight big tradeoffs: Vanderbilt researchers estimate a one‑year 10% cap would save consumers roughly $100 billion annually in interest but would also cost banks about $100 billion in revenue; Morgan Stanley and others warn that reduced access for low‑income and subprime borrowers could cut overall consumer spending (estimates ~5%) and offset some benefits.
- Consumer‑impact warnings: analyses say a hard 10% cap could prompt lenders to cut credit lines or cancel accounts for riskier borrowers (America’s Credit Unions estimates roughly two‑thirds of revolving‑balance cardholders and nearly all 47 million subprime borrowers could be affected) and incentivize shifts toward less‑regulated, more expensive products like payday loans and buy‑now‑pay‑later plans; banks might also respond by reducing rewards, raising fees or shrinking lines.
- Legislative and political developments: GOP Sen. Roger Marshall plans to introduce the Consumer Affordability Protection Act to impose a one‑year 10% cap on institutions with more than $100 billion in assets (with Democrats Dick Durbin and Peter Welch co‑sponsoring), but Senate GOP leaders have resisted the idea; Sen. Elizabeth Warren publicly supports a 10% cap and says she has urged Trump to push for legislative action.
📊 Analysis & Commentary (1)
Let companies set prices
"A pro‑market critique arguing that blunt price caps (such as a presidentially demanded 10% credit‑card APR) are poor policy: they create supply distortions, reduce access to credit, and shift costs rather than solve affordability problems, so lawmakers should favor targeted consumer protections and competition measures instead."
📰 Source Timeline (9)
Follow how coverage of this story developed over time
January 23, 2026
8:52 PM
Bank of America may introduce credit card with 10% APR
New information:
- A person familiar with Bank of America’s plans says the bank is considering launching a new credit card designed to comply with Trump’s proposed one‑year 10% APR cap.
- The article specifies current BankAmericard terms: 0% introductory APR for 18 months, then 14.5%–24% depending on credit score, illustrating how far typical pricing sits above 10%.
- New debt context: as of Q3 2025, U.S. credit‑card balances reached a record $1.2 trillion, up nearly 6% year‑over‑year, with average combined bank and store‑card balances near $7,900.
- TD Cowen analyst Jaret Seiberg is quoted predicting Treasury Secretary Scott Bessent will 'quietly push back' to avoid a hard 10% cap and suggesting any eventual cap, if it happened, could be higher.
- The piece notes fintech Bilt has already launched three new cards offering 10% APR for a year in apparent alignment with Trump’s call, indicating some niche market movement.
January 20, 2026
8:33 PM
Trump's 10% credit card cap deadline is here. Will card companies comply?
New information:
- Confirms that as of the Jan. 20 deadline, most banks and card issuers have left APRs largely unchanged despite Trump’s demand for a one‑year 10% cap.
- Clarifies there is currently no statute, regulation or executive order in force that actually mandates a 10% APR ceiling; CFPB notes there is no general federal rate cap.
- Reports that bank lobbyists and issuers say they are 'in the dark' on how to respond because the White House has provided no details on enforcement or legal basis.
- Updates the current average credit‑card APR to 19.7% at the end of December, one point below the August 2024 record, and notes that Fed rate cuts have been nudging APRs down.
- Quotes White House Press Secretary Karoline Leavitt saying Trump 'expects' compliance but offering no specific consequences for noncompliance.
- Highlights an America’s Credit Unions analysis claiming roughly two‑thirds of revolving‑balance cardholders and almost all 47 million subprime borrowers could see credit lines cut or canceled under a hard 10% cap.
January 15, 2026
2:00 PM
GOP senator pushes Trump's 10% credit card rate cap as party leaders push back
New information:
- Sen. Roger Marshall plans to introduce the Consumer Affordability Protection Act to impose a one‑year 10% cap on credit‑card interest rates.
- The cap would apply only to banks and financial institutions with more than $100 billion in assets, sparing community banks and most credit unions.
- Senate GOP leadership in both chambers is already resisting the idea, arguing it would cause credit scarcity.
- Democrats Dick Durbin and Peter Welch are co‑sponsoring Marshall’s bill, giving the measure a small bipartisan bloc.
- Elizabeth Warren says she supports a 10% cap and has told Trump she’s "all in," but criticizes him for not taking action so far.
- Trump publicly called for the cap to take effect Jan. 20, 2026, the one‑year anniversary of his second‑term inauguration.
January 13, 2026
10:45 PM
Stop attacking the Fed and credit card industry, Wall Street executives warn Trump
New information:
- BNY Mellon CEO Robin Vince warned that undermining Fed independence could shake the bond market and actually push interest rates higher, undercutting Trump’s affordability goals.
- JPMorgan Chase CEO Jamie Dimon publicly backed Powell’s integrity, saying he disagrees with some Fed decisions but has 'enormous respect' for him even as DOJ investigates.
- The article quantifies the hit from a 10% APR cap: Vanderbilt research estimates banks would lose roughly $100 billion in annual revenue given current average card rates around 19.65–21.5%.
- Shares of major card issuers, including American Express, JPMorgan, Citigroup and Capital One, fell sharply as investors priced in the threat of the cap.
- JPMorgan CFO Jeffrey Barnum signaled banks are prepared to fight the cap, though the article notes it is unclear whether Trump intends to impose it via executive action or by pressuring lenders to comply voluntarily.
5:34 PM
Wall Street CEOs warn Trump: Stop attacking the Fed and credit card industry
New information:
- BNY Mellon CEO Robin Vince publicly criticized Trump’s DOJ investigation of Fed Chair Jerome Powell, warning it risks undermining Fed independence and could actually push interest rates higher by shaking bond-market confidence.
- JPMorgan CEO Jamie Dimon said he does not agree with everything the Fed has done but expressed "enormous respect" for Powell and implicitly opposed political interference in the Fed.
- JPMorgan CFO Jeffrey Barnum signaled the industry is prepared to "fight with all resources at its disposal" against a one‑year 10% cap on credit‑card APRs, arguing it would cut the supply of credit rather than simply lower its price.
- The article notes that average U.S. credit‑card APRs are roughly 19.65%–21.5%, and reiterates Vanderbilt research estimating a 10% cap would cost banks about $100 billion a year in revenue, helping explain Monday’s sharp sell‑off in card‑issuer stocks.
- The piece underscores that Wall Street’s previously warm relationship with Trump has "suddenly soured" despite deregulatory moves and CFPB budget cuts that had generally benefited the industry.
3:04 PM
What Trump's 10% credit card rate cap would mean for consumers
New information:
- Vanderbilt University researchers estimate a one‑year 10% cap would save consumers roughly $100 billion annually in reduced interest payments.
- At a 10% APR, a $5,000 balance would incur about $42 a month in interest versus about $100 at the current ~24% average rate.
- LendingTree data put the current average credit‑card APR near 24%, with some subprime borrowers paying up to 36%.
- Morgan Stanley analysts estimate that if low‑income and subprime borrowers lost card access, overall U.S. consumer spending could drop about 5%, effectively offsetting any boost from lower rates.
- The American Bankers Association and some analysts warn a hard 10% cap could push riskier borrowers toward less regulated, more expensive products like payday loans and 'buy now, pay later' plans.
- Industry experts say banks might respond by cutting card rewards, raising annual fees, or shrinking credit lines, rather than simply exiting the market; others argue the business is 'massively profitable' and could absorb a cut through lower rewards rather than mass account closures.
11:11 AM
Elizabeth Warren says Trump called her after speech criticizing his record on costs
New information:
- Elizabeth Warren delivered a National Press Club speech accusing Trump of driving up costs, sowing terror and chaos, and abusing his power to prosecute critics, and saying he has done "nothing but raise costs" despite promising Day One relief.
- Warren says Trump phoned her after the speech; during the call she told him Congress can cap credit-card rates if he will "actually fight for it" and pressed him to get House Republicans to pass the bipartisan ROAD to Housing Act.
- A White House official confirmed to Fox that "President Trump and Sen. Warren had a productive call about credit card interest rates and housing affordability for the American people."
- Warren reiterated in her remarks that Trump has not taken "one damn thing" to lower housing costs for Americans, sharpening her critique of his economic record.
January 12, 2026
8:51 PM
Trump calls for a 10% cap on credit card interest rates
New information:
- Trump told reporters aboard Air Force One he wants a 10% credit‑card interest‑rate cap to take effect Jan. 20 and says card issuers would be breaking the law if they do not comply.
- NPR spells out that it is unclear whether a president can impose such a cap without Congress and notes Trump has not specified whether he would seek legislation, issue an executive order or use some other mechanism.
- The article gives fresh average‑APR data from the Federal Reserve (22.3% as of November 2025, up from 13.9% a decade earlier) and explains the link to elevated Fed policy rates and rising delinquencies.
- NPR adds more detailed pushback from industry — including Bank Policy Institute language that a 10% cap would be “devastating” and drive borrowers toward less‑regulated, more expensive credit — and ties it directly to Monday’s drop in bank stocks.
- It updates the political context by quoting Warren’s response that Trump has "done nothing but try to shut down the CFPB," and recounts the current lawsuit over whether the administration can starve the CFPB of staff and funding and the recent court ruling that it must keep seeking funds.