Jan 22 (Reuters) – Bank of America and Citigroup are considering options to offer new credit cards with an interest rate of 10% to satisfy President Donald Trump’s demands, Bloomberg News reported on Thursday.
Both banks are separately weighing the new cards as a potential solution to a broad cap on rates, the report said, citing people familiar with the matter.
Citigroup and Bank of America did not immediately respond to Reuters’ requests for comment.
BofA’s shares were nearly 2% higher in afternoon trading, while Citi was up 2.4%.
Trump said on Wednesday he would ask Congress to approve a 10% interest rate cap on credit cards for one year.
Analysts have said such a move would require legislation, with passage in Congress unlikely. Some also noted that the industry could push for a compromise where lenders launch no-frills cards at the 10% rates with fewer benefits.
Executives have warned a wide-ranging cap on all cards would prompt a pullback on lending and curb economic growth, though some experts argue credit cards are highly profitable and have room for lower rates.
U.S. banks had faced a Tuesday deadline to implement a credit card interest rate cap first proposed by Trump in a Truth Social post, but the White House had not provided details on how such a cap would be enforced.
Bank of America CEO Brian Moynihan has said the proposal would restrict access to credit, while Citigroup’s top boss Jane Fraser has stated it would have an impact on spending and the economy.
(Reporting by Utkarsh Shetti in Bengaluru; Editing by Alan Barona)
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