Capital One CEO Richard Fairbank warns that Trump’s proposed 10% cap on credit card interest rates could restrict consumer access to credit and destabilize the economy. Fairbank argues that price controls won’t make credit more affordable but will limit availability, potentially leading to a recession. Banks may be forced to slash credit lines and restrict accounts.

Fairbank highlights the significant role consumer credit plays in the U.S. economy, with 70% of GDP driven by consumer spending, including $6 trillion on credit cards. He warns that a contraction in available credit could have widespread economic repercussions, impacting retailers, airlines, hotels, and consumers’ ability to build credit history.

Analysts note that Capital One is particularly vulnerable to interest rate caps due to its reliance on revolving credit card balances and net interest income. The company reported $279.6 billion in credit card loans, the largest share of its total loan portfolio at $453.6 billion.

Other industry experts, including JP Morgan CEO Jamie Dimon, have also criticized Trump’s interest rate cap proposal, warning of dire economic consequences. Dimon stated that the plan could remove credit from 80% of Americans and lead to an economic disaster. Economists caution against the potential negative impact on rewards programs and credit access for consumers.

Capital One released its fourth-quarter results, reporting $15.58 billion in revenue, up 52.92% year-over-year but falling short on earnings at $3.86 per share. The stock fell 3.31% after hours despite a 1.76% increase during the regular session. Fairbank’s warnings align with concerns raised by other economists and industry leaders about the potential effects of an interest rate cap on credit cards.

Read more at Yahoo Finance: $6 Trillion Consumer Spending At Stake