Veriton Investment

Dimon Says Trump’s Card Cap Would Spell ‘Economic Disaster’

(Bloomberg) -- Jamie Dimon said President Donald Trump’s proposal to cap credit-card interest rates would spell “economic disaster” for the US, forcing banks to pull credit lines for the many Americans.

Speaking at the World Economic Forum in Davos, Switzerland, the JPMorgan Chase & Co. chief executive officer said his firm will give a “real analysis” of the proposal to the government. JPMorgan has already provided some thoughts on the idea, “but not a lot,” Dimon said.

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Trump earlier this month called for a one-year, 10% cap on credit card rates to go into effect on Jan. 20, a deadline that came and went without noticeable changes from the industry. The president has said his proposal is part of a broader push to reduce costs for Americans. With few specifics, banks and payment firms have been trying to ready themselves for any follow-up details that might come from the administration.

Banks have argued that an interest-rate cap would force lenders to drastically pull back on credit they provide to consumers, leaving them with more expensive and less reliable venues such as payday lenders and pawn shops. The proposal has received some support from Democratic officials, who have been pushing for similar moves in proposed legislation.

“Our business, you know, we would survive it by the way,” Dimon said. “In the worst case, you’d have to have a drastic reduction of the credit-card business.”

In the wide-ranging interview, Dimon also addressed the escalating disagreements between Europe and US amid concern that a new world order may crack the alliance. Dimon said he “would be more polite” than the Trump administration has been in criticizing Europe.

While the president’s tough stance on immigration has sparked a national debate, Dimon said he was angry at the Biden administration for leaving policies too loose and failing to secure the border.

“Trump comes in, boom, it’s closed. Gold bless him,” Dimon said. “Countries have to control their borders or they will cause huge problems.”

But the CEO did take issue with the US Immigration and Customs Enforcement agency’s harsh tactics, which have sparked widespread demonstrations.

“I don’t like what I’m seeing with five grown men beating up little women,” Dimon said. “I think we should calm down a little on the internal anger about immigration.”

(Updates with comments on Europe, immigration starting in the sixth paragraph.)