Citi's CFO Warns of Harmful Effects of Proposed Credit Card Rate Cap

Mark Mason, the Chief Financial Officer of Citigroup, has voiced his concerns regarding President Donald Trump's suggested 10% ceiling on credit card interest rates, highlighting potential serious repercussions.

During a pre-earnings announcement call held in the morning, Mason made it clear that an interest rate ceiling is something Citi neither endorses nor finds supportable. He emphasized that such a cap would likely limit credit access for individuals who are in most need, thus negatively affecting the economy.

Although repeatedly approached about speculating on the impact of the cap due to limited data, Mason assured that Citi intends to collaborate with the Trump administration on the critical matter of making credit affordable.

When pressed by journalists, Mason reiterated that the proposed cap might not benefit the customers it intends to help, according to Trump's goals. He later emphasized that the economy would suffer adverse effects due to such a policy.

Broader Financial Concerns

In a similar vein, the CFO of JPMorgan had earlier cautioned that implementing an interest rate cap could be detrimental to the bank's lending operations as well as pose challenges for consumers.

Other Financial Updates from Citi

Citi reported a 13% drop in profits for the third quarter, amounting to $2.47 billion, which was partly attributable to selling off its Russian operations. Meanwhile, advisory fees in financial services soared by 84% during the last quarter, largely revitalized under the leadership of a veteran from JPMorgan.

The bank observed a 38% rise in revenues from its investment banking division, along with a 35% increase in banking fees, marking significant growth in this sector.

Citi also noted that its ambitious initiative aimed at modernizing the bank and reducing expenses is more than 80% finished. This initiative includes strategic changes such as staff reductions, new hiring, and substantial financial investments.