US Bancorp CEO Discusses Potential Impact of Credit Card Interest Rate Cap
On January 20, the CEO of U.S. Bancorp, Gunjan Kedia, expressed serious concerns regarding President Donald Trump’s proposed 10% cap on credit card interest rates. He indicated that such a move could significantly affect customers and the overall economy, resonating with worries from the banking sector.
Kedia noted, “Our estimates suggest that over 90% of customers could face negative consequences if credit card interest rates were universally capped at 10%. For about half of those customers, the results would be catastrophic, and it would also have a broad economic impact.” This statement came as investors awaited clarity on whether the proposed interest rate cap would actually go into effect.
Wall Street analysts have indicated that the proposal would likely require new legislation, which seems improbable. Sanjay Saklani, a managing director at KBW, mentioned, “A potential compromise negotiated by the administration might be the only feasible route.”
Kedia also pointed out that discussions around interest rate caps have recently shifted towards more productive solutions that could assist customers in the short term.
U.S. Bancorp is one of the largest credit card issuers in the nation, holding $31 billion in credit card loans by the end of 2025, primarily serving prime borrowers. Kedia highlighted that the bank is also exploring ways to improve financial education, helping customers understand their options better.
When asked about the proposed revival of the Credit Card Competition Act, Kedia responded that this could be “very costly for many small merchants and would not meet its intended goals.”
Interestingly, the bank’s fourth-quarter profit surpassed analysts’ expectations due to increased interest payments and rising fee income. The cut in interest rates by the Federal Reserve has amplified the demand for loans across the sector, positively affecting profits for major consumer banks.
U.S. Bancorp reported earnings of $1.26 per share for the quarter, exceeding the anticipated $1.19, based on data from LSEG. Looking ahead, excluding the planned acquisition of BTIG, the bank forecasts a revenue increase of 4% to 6% in 2026.
