US Banks Post Soaring Profits; Trump Demands Credit Card Rate Cap

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AuthorVihaan Mehta|Published at:
US Banks Post Soaring Profits; Trump Demands Credit Card Rate Cap
Overview

Major U.S. banks including Bank of America, Citigroup, and Wells Fargo reported strong quarterly profits, driven by resilient consumer spending and healthy dealmaking. However, a conflict is brewing with President Trump over his demand to cap credit card interest rates at 10%, which banks warn could restrict credit and harm the economy.

Profits Surge Amid Economic Resilience

Wall Street witnessed strong earnings reports on Wednesday from banking giants Bank of America, Citigroup, and Wells Fargo. Despite ongoing geopolitical risks, these institutions posted significant profit increases, signaling a robust financial sector and a consumer proving resilient.

Brian Moynihan, CEO of Bank of America, expressed optimism, stating, "While any number of risks continue, we are bullish on the U.S. economy in 2026." Citigroup's CFO, Mark Mason, echoed this sentiment, describing both consumers and businesses as "resilient" in managing uncertainty.

Bank of America reported a profit of $7.6 billion, or 98 cents per share, a rise from $6.8 billion a year prior. Revenue reached $28.4 billion. Wells Fargo earned $5.36 billion ($1.62 per share), up from $5.08 billion ($1.43 per share) year-over-year, with revenues totaling $21.3 billion.

Trump's Credit Card Rate Standoff

The positive earnings come amid a new friction point between Wall Street and the White House. President Donald Trump publicly called for capping credit card interest rates at 10%, a move banks argue is unfeasible. They contend such a cap would restrict vital credit access for those who need it most, leading to detrimental economic impacts.

Bank executives have pushed back against Trump's proposal. Citigroup's Mason stated, "An interest rate is not something we could or would support. It would restrict credit to those who need it the most and have a delirious impact on the economy." This stance marks a departure from the banks' prior alignment with the administration on tax cuts and deregulation.

Consumer Health Remains Stable

Executives reported little evidence of a "K-shaped" economy, where wealth inequality widens dramatically. Instead, consumer spending remains strong, and key metrics like delinquency and charge-off rates are stable. Bank of America noted a 6% rise in credit and debit card spending, with balances growing 3% to $103 billion. Wells Fargo also observed increased consumer loan activity and stable credit metrics.

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