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President Donald Trump's endorsement of the “Credit Card Competition Act” has brought fresh regulatory pressure back onto payment networks. On Jan. 12, Trump urged lawmakers to back the bipartisan bill, writing on social media that it would “stop the out of control Swipe Fee ripoff.” Markets reacted quickly. Visa (V) shares dropped 4.7% in morning trading that day, while Mastercard (MA) fell 5.2% in the same session, marking the worst daily performance for both stocks in more than six months.
The policy risk also goes beyond the interest rate debate. The national average credit card rate is 19.7%, and Trump’s earlier Jan. 9 proposal to cap rates at 10% for one year pushed large bank stocks down 1% to 3% as investors reworked the math on consumer lending profits.
