BPInsights: January 24, 2026

Calling on Congress, CEO Comments: The Latest on Credit Card Rate Caps

The President's recent proposal to cap credit card interest rates at 10 percent for one year has elicited responses from lawmakers, potential Fed chair candidates and banking industry leaders. This week, President Trump called on Congress directly in a Davos conference speech this week to pass rate-cap legislation. "I'm asking Congress to cap credit card interest rates at 10 percent for one year, and this will help millions of Americans save for a home," he said.

• Congressional Concerns. A potential rate cap has garnered concerns from several key lawmakers, including Senate Majority Leader John Thune (R-SD), House Speaker Mike Johnson (R-LA), Sen. Pete Ricketts (R-NE) and Sen. Thom Tillis (R-NC). Thune said the proposal "would probably deprive an awful lot of people of access to credit around the country." Johnson warned of "secondary effects" of the proposal - "the credit card companies, the negative secondary effect is that they would just stop lending money, and maybe they cap what people are able to borrow at a very low amount."
• Industry Views. JPMorgan Chase CEO Jamie Dimon and Citigroup CEO Jane Fraser emphasized the negative economic effects of such a proposal in remarks this week. Dimon called it an "economic disaster," and Fraser cautioned against restricting access to credit. "No one wants a situation where only the rich have access to credit cards," she said. "You would not be able to provide credit and access to credit [to] the people who need it the most." U.S. Bank CEO Gunjan Kedia estimated on an earnings call this week 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 percent of the clients will be crushing, as it will be for the economy."
• House Markup. During a House Financial Services Committee markup on Thursday, Ranking Member Maxine Waters (D-CA) introduced an amendment to H.R. 7056, the Community Bank Regulatory Tailoring Act, that would place a cap on credit card interest rates at 10 percent. Ultimately, Chairman French Hill (R-AR) struck down the amendment as non-germane to the bill, and it therefore did not receive a vote.

Five Key Things

1. On the Sidelines in Switzerland: Davos Highlights

The President, Treasury secretary and other leading U.S. officials weighed in on major banking topics amid the Davos financial conference this week. Here are a few highlights.

• Fed Chair Selection Timing. In a Davos speech this week, President Trump said he will announce his pick for the next Fed chair in the "not too distant future." Candidates for the position include Kevin Hassett, Kevin Warsh, Rick Rieder and Christopher Waller. Treasury Secretary Scott Bessent suggested the announcement could be "as early as next week."
• Market Structure. Trump also said he is "working to ensure America remains the crypto capital of the world" and said he hopes to sign a crypto market structure bill very soon, with the goal of "unlocking new pathways for Americans to reach financial freedom."
• Deregulation. Secretary Bessent touted the administration's efforts to reverse excessive regulation of the banking sector, which he said has freed up trillions of dollars in lending capacity.
• Housing and Mortgages. Trump has repeatedly emphasized the importance of housing affordability in recent remarks, and in his Davos speech, suggested that mortgage rates need to be lower.

2. Supreme Court Hears Arguments in Fed Independence Case

The Supreme Court this week heard oral arguments in the Trump v. Cook case, focused on the standard and process for a President to remove a Fed governor "for cause." The Court appeared inclined to remand the case for further development at the district court level on both the process owed to Governor Cook by the President and the standard by which the courts would review any resulting decision to remove. The majority of the Court was inclined to require some showing to support "cause" and some opportunity for a Governor to prevent it, lest the standard become effectually at will. Justice Brett Kavanaugh warned that the administration's claims of broad, unreviewable firing authority "would weaken, if not shatter, the independence of the Federal Reserve."

• Likely Outcome. While the process due and standard to be applied are very difficult questions and the Court's decision there hard to predict, it appears highly likely that the Court will leave in place the injunction against her removal, leaving Governor Cook in her seat pending further proceedings below, which could last for some time.

3. FDIC Adds Representative with Banking Experience to New Supervisory Appeals Review Board in Final Rule

The FDIC on Thursday adopted final changes to its revamped supervisory appeals framework. The new framework will provide FDIC-supervised banks a right to appeal FDIC supervisory decisions, such as CAMELS ratings or Matters Requiring Board Attention, to an independent three-member panel of non-FDIC employees. The approach greatly strengthens bank due process protections as compared to the appeals framework long utilized by the FDIC. BPI endorsed and recommended several such enhancements in comments on the proposal.

What's New. The new framework incorporates significant - and in certain respects unprecedented - changes from existing practice, including:

• Each three-member board panel reviewing supervisory appeals will include at least one member with banking industry experience.
• Banks will be able to appeal certain supervisory actions even where an FDIC enforcement action is proposed or pending.

In remarks accompanying the release of the new supervisory appeals framework, FDIC Chair Travis Hill noted "[I]ncluding individuals with industry experience will broaden the perspectives reflected on a panel and allow the appellate process to benefit from a diversity of views while still ensuring the panelists have deep familiarity with the supervisory process."

What's on the Horizon. Comptroller Jonathan Gould announced that the OCC would propose a similar revised supervisory appeals framework taking into account comments on the FDIC's framework. According to the Comptroller, "the OCC will be following in the footsteps of the FDIC here and has learned a lot from your comment process." The Federal Reserve is also working on reforms to its supervision approach under the leadership of Vice Chair for Supervision Michelle Bowman.

Why It Matters. The significant changes to the appeals framework would enhance due process, accountability and fairness in bank supervision and better align the appeals process with what Congress intended. It is intended to serve as an impartial review authority on the actions of examiners, which are often based on complex judgment calls and can impose severe consequences on banks.

4. Banking and Credit Union Groups Urge Congress to Reject Durbin-Marshall Bill

The American Bankers Association, America's Credit Unions, Association of Military Banks of America, Bank Policy Institute, Consumer Bankers Association, Defense Credit Union Council, Independent Community Bankers of America, Electronic Payments Coalition, Electronic Transactions Association, Mid-Size Bank Coalition of America and National Bankers Association, this week sent a joint letter to members of Congress strongly opposing the so-called Credit Card Competition Act and any expansion of the Durbin amendment. The letter warns that government intervention in the U.S. credit card market would harm consumers, small businesses, and community-based financial institutions by reducing choice, increasing costs and fraud risks, and creating economic challenges for smaller institutions.

The letter highlights several key concerns:

1. Small Businesses Benefit Both from Card Acceptance and as Card Users: Research shows the Durbin-Marshall bill would primarily benefit the largest retailers, leaving small businesses at a competitive disadvantage. Studies estimate that nearly all savings would accrue to merchants with over $500 million in annual sales, while small businesses could lose up to $1 billion in rewards and face reduced access to $700 billion in revolving credit lines.
2. Community Banks and Credit Unions Would Be Harmed: Community-based financial institutions, which provide billions in loans and essential services, would be impaired by backdoor price controls on credit routing. Federal Reserve data confirms that similar measures under the Durbin amendment harmed exempted institutions, reducing revenue for lending and data security while increasing operational costs.
3. Consumers Would Lose Choice, Security, and Rewards: The bill would diminish access to affordable credit, particularly for low-income consumers, and eliminate popular rewards programs. Studies show 77% of cardholders earning less than $50,000 rely on rewards cards. Evidence also indicates retailers are unlikely to pass savings to consumers, with 98% raising or maintaining prices after the original Durbin amendment.

The letter also underscores that the U.S. payments ecosystem is already highly competitive, offering numerous options from credit and debit cards to real-time payments and digital wallets.

"The payment card system is convenient, secure, and essential to the American economy," the groups wrote. "The Durbin-Marshall bill jeopardizes consumer protections, rewards programs, and access to credit-all to benefit a handful of the largest merchants."

5. Traversing the Pond

Here's the latest in international banking policy.

• Basel Rules Published in UK. The UK Prudential Regulation Authority this week published its "Basel 3.1" capital rules, issuing a policy statement encapsulating the changes. Key differences from the last iteration of the rules include timing elements: a confirmation that the market risk component (Fundamental Review of the Trading Book) will be postponed by one year, and that the Basel 3.1 package will take effect on Jan. 1, 2027. The PRA's response to FRTB concerns raised by commenters suggests that it will proceed with the measure as drafted. The PRA also published measures on several related banking capital frameworks, such as Pillar 2A and CRR requirements.
• 'Major Step Forward.' David Bailey, head of the PRA's Prudential Policy Directorate, published an op-ed this week in City AM on the UK Basel rollout, saying it will mark "a major step forward for the banking sector."
• FSB Previews Resolution Next Steps. The FSB this week published its annual resolution report and outlined its plans for further work to "make resolution frameworks operational," such as a strategic review of its crisis preparedness activities.
• Croatia's Vujcic Poised for ECB Vice Presidency. Croatian central banker Boris Vujcic is slated to become the next No. 2 official at the European Central Bank. Vujcic will be the first Eastern European to join the institution's executive board, according to Bloomberg. He is expected to succeed current Vice President Luis de Guindos after he leaves at the end of May.
• Surveys Shows Knot as Frontrunner for ECB Top Slot. Dutch central banker Klaas Knot is seen as the most likely candidate to succeed ECB President Christine Lagarde, according to a recent Bloomberg survey of economists. The survey flagged Knot, followed by Pablo Hernandez de Cos and Joachim Nagel, as the most likely successor, but respondents viewed Isabel Schnabel as having the best skillset to take over.

In Case You Missed It

The Crypto Ledger

Here's the latest in crypto.

• The Rise of Yield-Bearing Stablecoins Would Reduce Bank Deposits and Lending. Crypto investment firm Paradigm mischaracterized a recent research paper about how stablecoin adoption affects bank deposits and loans. In fact, the paper finds that any growth in yield-bearing stablecoin adoption will reduce bank deposits and lending. The greater the growth in stablecoins, the greater the contraction in bank deposits and loans. Read more here.
• Boozman Releases New Market Structure Draft. The Senate has been in recess this week, but discussions on the crypto market structure bill remained active on Capitol Hill. Senate Agriculture Committee Chair John Boozman (R-MT) released a new draft bill on Wednesday, which received only Republican backing. Markups in both the Ag Committee and the Senate Banking Committee have been delayed.
• Judiciary Concerns. Sens. Chuck Grassley (R-IA) and Dick Durbin (D-IL), the chair and ranking member of the Senate Judiciary Committee, expressed concerns in a letter to Senate Banking Committee leaders Tim Scott (R-SC) and Elizabeth Warren (D-MA) about a section of the market structure bill that they view as belonging to the Judiciary Committee's jurisdiction. The particular provision would exempt some crypto software developers from financial licensing requirements, which Grassley and Durbin say would curtail law enforcement's ability to investigate money laundering and illicit finance in crypto.

Things to Watch Next Week

• The Senate Agriculture Committee will mark up crypto market structure legislation on Jan. 27.
• The FOMC holds a meeting on Jan. 27-28.

BPI Job Bank

• AVP, Research Analyst
• Junior Event Planner & Administrative Coordinator

Member News

Morgan Stanley's Ted Pick on M&A, the Economy

Morgan Stanley CEO Ted Pick discussed the M&A environment, the economic outlook and other topics in a recent Squawk Box interview alongside the Davos conference this week. Check it out here.

Upcoming Events

• 1/27/2026-1/28/2026: FOMC Meeting
• 1/27/2026: Senate Agriculture Committee Crypto Market Structure Markup