Trump's 10% Card Cap Could Shrink a $70B Credit-Card Bond Market

Trump’s push to cap credit-card interest at 10% could force lenders to bolster bonds backed by card debt, squeezing profits and likely shrinking the roughly $70 billion credit-card ABS market. The cap would reduce excess spread to crisis-era levels, potentially triggering capital injections or early amortization, with nonprime borrowers hit hardest. JPMorgan cautions issuance and profits could drop, Moody’s says the cap would be negative for credit-card bonds, and regulators may face implementation hurdles as banks warn tighter caps could slow lending and the economy.