In the past several days, President Trump has thrown his weight behind not one, but two major efforts at credit card industry reform.
He abruptly returned to his campaign trail vow Friday in seeking to put a temporary 10% cap on credit card interest rates and then surprised the industry on Tuesday by backing the long-languishing Credit Card Competition Act.
As a result, he’s officially inserted himself into a battle between the retail and restaurant industries on one side and the banking industry, along with their card network allies Visa and Mastercard, on the other side. It’s an intense war between equally powerful camps that’s been waged for decades.
Even with Trump’s support, the merchants coalition faces a mighty contingent of financial industry foes that have been attacking the CCCA proposal since 2022 when Sen. Dick Durbin, a Democrat from Illinois, joined with Republican Sen. Roger Marshall of Kansas to sponsor the bill.
Before news of the bill introduction first broke Tuesday, JPMorgan Chase came out swinging against Trump’s plug for an interest rate cap that he said was part of a campaign for “affordability.”
In comments Tuesday challenging Trump’s proposed 10% credit card interest rate cap, JPMorgan CFO Jeremy Barnum said during the bank’s fourth-quarter earnings presentation that if the cap were put in place, the big card issuer would be forced to “significantly change and cut back significantly” its credit card business.
Barnum also didn’t rule out legal action. “If you wind up with weakly supported directives to radically change our business that aren’t justified, you have to assume that everything’s on the table,” the CFO said.
By contrast, trade groups for merchants were over-the-top pleased with Trump’s support for the CCCA.
“Thank you, President Trump, for protecting America’s consumers and Main Street businesses,” National Association of Convenience Stores General Counsel Doug Kantor said in a press release. “Giant credit card companies and Wall Street banks have gotten away with price-fixing credit card swipe fees and sticking everyday Americans with the bill for years.”
The merchant groups argue that credit and debit card fees, collectively, have jumped 70% since the pandemic, reaching a record $187.2 billion for 2024.
Whether this president’s new credit card reform campaigns are a part of a populist publicity stunt ahead of the mid-term elections later this year is an open question, but maybe a moot one. “Everything is a publicity stunt to him, but some of those stunts end up working,” said Cliff Gray, an industry consultant who has followed the merchant-bank fight.
Kantor has spearheaded a decades-long effort by merchants to reduce fees paid for consumers’ credit and debit card use.
It’s coming to a head just as other key decisions hang in the balance this year. Specifically, the Federal Reserve is poised to decide whether to lower a cap on debit card fees and a federal judge is mulling whether to approve a proposed settlement of 20-year-old litigation between the networks and merchants.
While trade groups for merchants have been very vocal this week, merchants themselves have been surprisingly quiet. Walmart declined to comment on the developments, and other major retailers, including Target and Kroger, didn’t immediately respond to requests for comment.
Aside from the industry battle royale, the political machinations promise to be just as exciting.
While Trump was willing to get behind Republican Sen. Roger Marshall Tuesday as the sponsor of the CCCA, he hasn’t had much to say about an interest rate cap proposal sponsored by Republican Sen. Josh Hawley, who has endured the president’s wrath on other issues this week.
Trump may not favor Hawley’s co-sponsor on the bill, Sen. Bernie Sanders, an independent who caucuses with Democrats, but he has been willing to talk this week with Democrat nemesis Sen. Elizabeth Warren, who said she has been in touch with Trump about his affordability agenda.
Any situation where Trump finds himself talking more to Warren than a fellow Republican portends high political drama.
