JPMorgan CFO defies Trump on credit card interest: 'We owe it to shareholders'

JPMorgan Chase CFO Jeremy Barnum told analysts on the bank's earnings call on Tuesday that the industry could fight US President Donald Trump's demand to cap credit card interest rates at 10% for a year.

"If you wind up with weakly supported directives to radically change our business that aren't justified, you have to assume everything's on the table," Barnum said, adding "we owe that to shareholders."

Shares of JPMorgan fell over 4% on Tuesday after its quarterly results, which beat expectations overall, but its investment banking business underperformed, leading to the stock fall, which in turn, weighed on the Dow Jones as well.

Even before its results, JPMorgan and other credit card-exposed companies have seen their stock price being pressured due to Trump's demand.

Average credit card interest rate across the US is around 19.7% in January, according to CNBC, citing a survey from bankrate.com. The rate for subprime borrowers and store-specific cards are higher.

"Instead of lowering the price of credit, we'll simply reduce the supply of credit, and that will be bad for everyone: consumers, the wider economy, and yes, at the margin, for us," Barnum said.

When asked whether JPMorgan would comply with Trump's directives to cap rates by January 20, Barnum refused a comment. Trump has said over the weekend that institutions that do not comply with his directive will be in "violation of the law."

It remains unclear as to how Trump's demand will be implemented. Multiple such bills to cap credit card interest rates, including one introduced last year by Senator Josh Hawley of Missouri and Senator Bernie Sanders of Vermont, which proposes to cap the interest rate at 10% for five years, is currently stalled in the Congress.

"We have a lot of work to go [on] consensus around it, but you got to be very careful as we go forward in that in our zeal to bring down costs — you don’t want to have negative secondary effects," house speaker Mike Johnson said.

(With Inputs From Agencies.)