Major banks are pushing back against former President Donald Trump's proposal to cap credit card interest rates. Institutions like Citigroup and Wells Fargo warn that such a move would backfire, restricting access to credit for millions of consumers. They argue the policy, intended to help borrowers, could instead trigger a sharp contraction in lending.

The banking industry's stance reflects a long-held position that interest rate caps are economically damaging. Financial institutions contend they need to price for risk across their entire customer base. If high-rate lending becomes unprofitable, banks may pull back products entirely, affecting not just risky borrowers but also overall credit availability and consumer spending power.

Trump floated the idea during his campaign, suggesting a cap around 10%, well below current average APRs. This sets up a potential clash between populist political promises and the powerful financial lobby. The debate centers on whether government intervention helps consumers or simply limits their options in a complex credit market.