By Arasu Kannagi Basil
Jan 20 (Reuters) – U.S. Bancorp CEO Gunjan Kedia warned on Tuesday that President Donald Trump’s proposed 10% cap on credit card interest rates would significantly impact its clients and the broader economy, echoing concerns raised by the banking industry.
“Our estimate is that 90 plus percent of our clients will see a detrimental impact if there was an across-the-board 10% rate cap on credit cards. The impact to 50% of the clients will be crushing, as it will be for the economy,” Kedia told analysts.
The comments come as investors await clarity on whether the January 20 deadline for the rate cap would take effect. Wall Street analysts have said the proposed move would require legislation and is unlikely to pass.
“The only somewhat viable option is if the administration can get the industry to reach some type of negotiated compromise,” said Sanjay Sakhrani, KBW managing director.
Kedia said the conversation around the rate cap has shifted more productively in recent days towards options to help customers in the short term.
The bank is one of the biggest U.S. credit card issuers. It ended 2025 with $31 billion in credit card loans and is mainly a prime lender.
The fifth-largest U.S. lender is also exploring ways to increase financial education to ensure customers are aware of what options they have, Kedia said.
Asked about the reintroduction of the proposed Credit Card Competition Act, Kedia said the proposal would be “very costly for many small merchants and not achieve the goal intended.”
PROFIT BEAT
The bank’s fourth-quarter profit beat analysts’ expectations as it earned more from interest payments and saw growth in fee revenue.
The Federal Reserve’s rate cuts have lifted loan demand across the industry and boosted earnings at Wall Street’s top consumer banks.
On a per share basis, U.S. Bancorp earned $1.26 in the quarter, topping estimates of $1.19, according to data compiled by LSEG.
Excluding the proposed acquisition of BTIG, U.S. Bancorp expects between 4% and 6% revenue growth in 2026.
(Reporting by Arasu Kannagi Basil in Bengaluru; Editing by Pooja Desai and Maju Samuel)
