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Investing.com --Bank of America(NYSE:BAC) stock rose to a session high of 1% andCitigroup(NYSE:C) gained 1.4% after a Bloomberg report revealed both banks are considering offering credit cards with a 10% interest rate cap.
The move comes in response to President Donald Trump’s recent demand for a one-year cap on credit card interest rates at 10%. Capital One Financial (NYSE:COF) shares jumped 3%, while American Express (NYSE:AXP) and Synchrony Financial (NYSE:SYF) rose 2.8% and 2.75% respectively on the news.
According to people familiar with the matter, both banking giants are separately exploring these lower-rate card options as a potential compromise with the administration. Earlier this week, Trump indicated he would ask Congress to implement his proposal, which has faced criticism from banking executives who warn it could lead to reduced credit availability for consumers.
Bank of AmericaCEO Brian Moynihan acknowledged in a Bloomberg TV interview Thursday that while a 10% cap would likely slow consumer spending, the bank is actively engaged with the administration on the issue. "We’re working hard," Moynihan said. "We’re trying to come up with solutions."
Both Bank of America andCitigroupalready offer introductory rates as low as 0% for limited periods. Representatives from both banks declined to comment on the report.
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