New York, Jan 20, 2026, 12:28 EST — Regular session
- Wells Fargo shares slipped alongside other U.S. bank stocks as the deadline for Washington’s credit-card rate cap hit.
- Investors are debating whether a 10% cap can be enforced at all without congressional approval
- Up next: any guidance released after the close and the Federal Reserve’s meeting scheduled for next week
Wells Fargo & Co shares dropped 0.6% to $87.84 in midday trading Tuesday as U.S. bank stocks fell ahead of a Trump administration deadline linked to a proposed 10% cap on credit card interest rates. The S&P 500 Banks index slid 1.2%, while JPMorgan Chase and Citigroup declined 1.8% and 2.4%, respectively. 1
The policy threat hits a lucrative slice of consumer banking: interest from card balances. U.S. Bancorp CEO Gunjan Kedia cautioned that “90 plus percent” of its customers would suffer if a broad cap is imposed. KBW managing director Sanjay Sakhrani added that a negotiated compromise seems “the only somewhat viable option.” 2
Bank lobbyists fired back hard. The American Bankers Association pointed to fresh data from issuers representing about 75% of the market, showing that a 10% cap could force 74%–85% of open credit card accounts to close or see their credit lines slashed. That would leave up to 159 million cardholders unable to use their cards. “Interest rate caps lead to fewer options,” ABA chief executive Rob Nichols said. 3
Citigroup CEO Jane Fraser said she doubts Congress will approve an interest-rate cap, cautioning it could limit credit availability and impact sectors that depend on card spending. “Capping rates would not be good for the U.S. economy,” Fraser told CNBC during an interview at Davos. 4
The scene remains unsettled. On Tuesday, the Cboe Volatility Index — Wall Street’s so-called “fear gauge” derived from options pricing — hit its highest point in eight weeks amid renewed tariff threats targeting Europe. The S&P 500 slipped roughly 1%. 5
Wells Fargo now faces a pressing question: will the administration deliver enforcement or just the mechanics after hours? A strict cap on unsecured credit would pinch pricing, potentially pushing lenders to cut rewards, raise fees, or tighten limits to safeguard profits.
The road ahead is anything but smooth. Executives and analysts caution that a blunt cap might backfire, tightening credit for borrowers. Banks have even suggested they might challenge any unilateral action in court. Should Washington pull back or opt for voluntary low-rate offerings, the sector could stabilize quickly.
Traders are watching rates closely ahead of the Federal Reserve’s policy meeting set for Jan. 27-28. Bank stocks often react to changes in expectations around borrowing costs and credit demand. 6
Treasury Secretary Scott Bessent said President Donald Trump might choose the next Fed chair as soon as next week, a move markets will watch closely for clues on future rate policy. “My guess is that the president will reach a decision, maybe as soon as next week,” Bessent told CNBC. 7
Wells Fargo investors are focused this afternoon on two key points: whether the White House will weigh in on the credit-card cap following Tuesday’s deadline, and what next week’s Fed meeting might reveal about the duration of this policy-driven volatility.
