Trump’s 10% Credit-Card Cap Proposal Sends Bank Stocks Tumbling Premarket

Wall Street's traditional lenders just got a regulatory gut punch—and crypto is watching with a smirk.

The Proposal That Shook the Street

A call to cap consumer credit-card rates at a hard 10% sent shockwaves through premarket trading. Banking giants—the very pillars of the old financial order—saw their shares dump instantly. The move targets the lucrative interest income that has long fueled their profit engines.

Decentralized Finance Doesn't Blink

While legacy banks scramble, the parallel universe of decentralized lending protocols operates on a completely different rulebook. Rates aren't set by boardrooms or political caps; they're determined by open-market supply and demand. Need a loan? Smart contracts execute—no middleman, no arbitrary limit, just code.

It's a stark reminder: centralized control creates centralized points of failure—and pain. One policy shift, one headline, and billions in market value can evaporate overnight. Meanwhile, permissionless protocols hum along, governed by math and consensus rather than political whim.

The old guard is learning a brutal lesson in real-time: when your business model relies on regulatory favor and captive customers, you're always one election cycle away from a reckoning. Crypto's value proposition—censorship-resistant, globally accessible, and politically agnostic finance—just got a multi-billion-dollar advertisement.

Trump’s 10% cap catches financial giants off guard

Trump’s post was blunt. “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%,” he wrote. Then he added, “We will no longer let the American Public be ‘ripped off’ by Credit Card Companies.”

Nothing about how it WOULD actually work. No mention of what happens to existing balances. Just a demand. Technically, it would need Congress to pass it. But there’s already been support for this idea. Democrats and Republicans have introduced bills in the past with the same 10% limit. So this isn’t coming out of thin air.

Barclays took one of the hardest hits for a reason. Its U.S. bank unit makes most of its money from credit cards. It has 20 million American customers. They offer store cards, small business cards, co-branded cards, basically the whole package.

They recently grabbed Gap’s card program away from Synchrony, and took over GM’s card business too. So yeah, they’re deep in this. That’s why they’re bleeding.

Earnings week starts with bad timing for the sector

Now here’s the kicker. This all happened right before earnings season kicks off for the big banks. JPMorgan reports Tuesday morning. It’s expected to post record revenue and profits again.

On Wednesday, Bank of America, Citigroup, and Wells Fargo will show their numbers. Thursday brings Goldman Sachs and Morgan Stanley. Analysts think all six will report more profit than last year. They’re also expecting record trading fees. That is except for Wells Fargo, which has a smaller investment banking team. But even they’re on track to post a new high in dealmaking fees.

Saul Martinez from HSBC said, “Everything is going up at the same time, right now.” He pointed to more lending, market gains, and big profit jumps.

Last year was huge. The KBW Nasdaq Bank Index jumped 29% in 2025. The S&P 500 only ROSE 17%. Ebrahim Poonawala from Bank of America said he sees this year as the third straight win for banks. “Banks outperformed the S&P 500 for three consecutive years in late 1990s, and then again in early 2000s. We see similarities to both,” he told clients.

He also said the profit setup this year is the best since the 2008 crash.

That might explain why investors went in hard last year. JPMorgan, Bank of America, Citigroup, and Wells Fargo all jumped 40% on average in 2025. But it wasn’t all earnings.

Steven Chubak at Wolfe Research broke it down: only a third of that came from profit growth. The rest came from what people were willing to pay for those profits. That confidence just took a hit.

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