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Why a decree doesn't change credit card interest rates — but it changes the game
350 sats \ 3 comments \ @Macro 10 Jan Stacker_Stocks

Credit card rates are governed by the National Bank Act, which lets nationally chartered banks charge interest based on the rules of their home state. That’s why so much credit card lending runs through places like Delaware and South Dakota. That setup was locked in by the 1978 Supreme Court case Marquette v. First of Omaha, which basically said banks can export their home state rate nationwide. A president can’t override that by executive order.

An executive order could tell agencies like the CFPB, OCC, FDIC, and even the Federal Reserve to study the issue, tighten supervision, or lean on banks through enforcement and exams. But without Congress changing the law, usually by amending the Truth in Lending Act or the National Bank Act itself..a hard 10% cap wouldn’t legally stick and would almost certainly get challenged in court.

That said, pressure still matters. Banks care deeply about regulatory heat and public optics. When a president is openly calling 20–30% APRs a rip off, regulators start asking questions, headlines turn ugly, and banks start managing risk. You probably don’t get a clean 10% cap, but you can see behavior shift at the margins with more promo rates, lower APRs for prime customers, expanded hardship programs, fee tweaks, or quieter changes meant to avoid looking predatory.

So he’s basically setting an anchor. A simple number people instantly understand. It reframes the issue from abstract rates or monetary policy to “banks are gouging consumers,” which plays well when households are under pressure. More importantly, it signals to banks that this could become real legislation if the economy weakens and Congress feels forced to act.

So i believe this is less about the mechanics of law and more about leverage and timing. Credit cards are the most visible consumer pain point. He’s planting a flag there early. If Congress moves, he claims the win. If banks preemptively adjust, he still claims success. And if nothing changes, he still owns the narrative. That’s the real play.

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16 sats \ 0 replies \ @BlokchainB 10 Jan

Great summary

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0 sats \ 1 reply \ @Bell_curve 10 Jan

I am skeptical about this executive order but it's a smart move politically

Are Democrats going to criticize Trump for capping rates and interfering with the 'free market'?

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0 sats \ 0 replies \ @Bell_curve 10 Jan

While the 10% cap is a massive populist play, it is deeply intertwined with what Trump calls his "War on Debanking."

He has explicitly linked his frustration with the financial system to his family’s personal experiences. In August 2025, he signed the "Guaranteeing Fair Banking for All Americans" Executive Order, which was a direct response to these grievances.

1. The Personal Motivation1. The Personal Motivation

Trump and his allies have frequently cited specific instances to justify this "war":

  • The "Blacklist": Trump has claimed that his family has been blacklisted by at least a dozen financial institutions since 2021.
  • Family Impact: His administration has publicized that Melania Trump’s credit card was denied and that Barron Trump was allegedly refused a bank account.
  • Business Closures: In early 2025, the Trump Revocable Trust sued Capital One, alleging the bank closed hundreds of accounts tied to his businesses without cause.

2. The "Hidden Agenda": Retaliation vs. Reform2. The "Hidden Agenda": Retaliation vs. Reform

By framing the 10% cap and the debanking EO together, the agenda becomes two-pronged:

  • The "Stick": The 10% cap is the "stick" used to beat the large banks (like JPMorgan Chase and Capital One) that he feels targeted him. If the cap makes their credit card business unprofitable, it is a form of regulatory "revenge."
  • The "Shield": The debanking EO forces regulators to stop using "Reputational Risk" as a reason to close accounts. This effectively prevents banks from firing clients (like him or his supporters) just because of political blowback.

3. Why it's a "Clever" Political Trap3. Why it's a "Clever" Political Trap

This is where the strategy gets sophisticated. By declaring "war" on banks for "debanking" him, he achieves three things at once:

  1. The Victim Narrative: He portrays himself as a victim of the "Deep State" and "Woke Wall Street," which resonates with his base.
  2. The Populist Hero: By adding the 10% cap to the "war," he makes his personal grievance look like a fight for everyone’s wallet. It’s hard to call it "personal revenge" when he’s promising to lower everyone’s interest rates.
  3. The Regulatory Override: He is using his executive power to dismantle the very tools (like the CFPB's late fee caps, which he initially rolled back) and then replacing them with his own more aggressive, albeit legally shaky, 10% cap.

4. The Counter-Move4. The Counter-Move

Banks are now in a "lose-lose" position. If they fight the debanking EO, they look like they want to discriminate. If they fight the 10% cap, they look like they are "gouging" the American people.

Trump is essentially using the banks as a political foil for the 2026 midterms—giving voters a clear "villain" to blame for high costs and "unfair" treatment.

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