SoFi CEO Warns 10% Credit Card Rate Cap Could Constrict Lending
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2d ago
0mins
Source: Benzinga
- Credit Contraction Risk: SoFi CEO Anthony Noto warns that a proposed 10% cap on credit card interest rates could lead to a significant contraction in credit card lending, resulting in fewer credit options for borrowers and potentially impacting consumer spending and economic growth.
- Profitability Challenges: Noto emphasizes that credit card issuers would struggle to maintain profitability under a rate cap, likely responding by reducing approvals, lowering credit limits, or closing accounts, which would further restrict consumer access to credit.
- Shift to Alternative Products: As access to credit cards narrows, consumers may turn to personal loans and similar installment products, which typically offer lower interest rates and amortizing structures, potentially altering borrowing preferences.
- Industry Opposition: JPMorgan CFO Jeremy Barnum states that capping interest rates could severely limit consumer access to credit, with banking associations warning that this would push consumers toward less regulated and more costly alternative credit products.
Analyst Views on JPM
Wall Street analysts forecast JPM stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for JPM is 341.38 USD with a low forecast of 260.00 USD and a high forecast of 400.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
19 Analyst Rating
11 Buy
7 Hold
1 Sell
Moderate Buy
Current: 301.040
Low
260.00
Averages
341.38
High
400.00
Current: 301.040
Low
260.00
Averages
341.38
High
400.00
About JPM
JPMorgan Chase & Co. is a financial holding company. The Company is engaged in investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing and asset management. The Company operates through three segments: Consumer & Community Banking (CCB), Commercial & Investment Bank (CIB), and Asset & Wealth Management (AWM). Its CCB segment offers products and services to consumers and small businesses through bank branches, ATMs, digital and telephone banking. Its CIB segment consists of banking and payments and markets and securities services, and offers a suite of investment banking, lending, payments, market-making, financing, custody and securities products and services to a global base of corporate and institutional clients. AWM segment offers investment and wealth management solutions. It offers multi-asset investment management solutions, retirement products and services, brokerage, custody, estate planning, and others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
