Shares in major U.S. lenders plummeted Monday morning after President Donald Trump blindsided the financial sector with a proposed 10% ceiling on credit card interest rates.
The surprise announcement, issued late Friday via Truth Social, has sent shockwaves through a banking industry that had previously anticipated a period of historic deregulation.
Lenders with heavy concentrations in consumer finance bore the brunt of the selloff.
Capital One Financial Corp. and Synchrony Financial—which focus almost exclusively on credit card lending—saw their shares slide as much as 11% in premarket trading.
Industry titans American Express and Citigroup dropped 4.8% and 4% respectively, while JPMorgan Chase and Bank of America also traded lower as investors weighed the threat to net interest income.
"Effective January 20, 2026, I, as President of the United States, am calling for a one year cap on Credit Card Interest Rates of 10%," Trump wrote, setting a deadline that coincides with the first anniversary of his second term.
He doubled down on the proposal Sunday while aboard Air Force One, telling reporters that lenders who do not comply would be "in violation of the law."
The proposal creates an immediate headache for Wall Street analysts.
Wells Fargo’s Mike Mayo described the move as "Yikes," estimating that a 10% cap could slash large bank pre-tax earnings by 5% to 18%.
For pure-play card lenders, the impact could be even more severe, potentially wiping out annual earnings entirely if risk cannot be priced above the 10% threshold.
Industry trade groups, including the American Bankers Association and the Bank Policy Institute, warned that the cap would be "devastating" for credit availability.
They argue that forcing rates to 10%—well below the current average of 22.3%—would compel banks to shutter millions of accounts and push subprime borrowers toward "loan sharks" and unregulated payday lenders.
Legal experts remain skeptical of the President’s authority to enact such a cap without an act of Congress.
While the proposal finds unusual allies in progressives like Senator Bernie Sanders, the National Bank Act currently grants lenders the right to charge rates permitted by the states where they are headquartered.
Despite the legal hurdles, the mere threat of executive action has sparked a flight to "Buy Now, Pay Later" (BNPL) stocks like Affirm, which rose 3% on the prospect of capturing displaced bank customers.