Capital One Financial Corp. (NYSE:COF) CEO Richard Fairbank issued a stark warning about the potential consequences of President Donald Trump’s proposed 10% cap on credit card interest rates, saying the move could severely restrict consumer access to credit and destabilize the broader economy.
Trump’s Proposal Will Lead To A ‘Recession’
During the company’s fourth-quarter earnings call on Thursday, Fairbank argued that “putting a price control in place” will not make credit more affordable, but would instead make credit “less available for consumers, up and down the credit spectrum.”
“This is far more than a subprime issue,” he said, adding that banks would be “compelled to immediately slash credit lines, restrict accounts, and limit new originations to a very small subset of consumers.”
Fairbank pointed to the outsized role that consumer credit plays in the U.S. economy. “Consumers are the backbone of the American economy,” he said, noting that 70% of the country’s GDP is driven by consumer spending and “$6 trillion of that spending …