Major US banks are experiencing a surge in profits, with Bank of America, Citigroup, and Wells Fargo reporting strong financial results.This positive performance comes at a time when these institutions are facing increasing tensions with President Donald Trump over proposed changes to credit card interest rates.
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courthousenews.comwsls.comBank of America announced a profit of $7.6 billion for the latest quarter, up from $6.8 billion a year earlier, translating to earnings of 98 cents per share.
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courthousenews.comSimilarly, Wells Fargo reported a profit of $5.36 billion, an increase from $5.08 billion, with earnings of $1.62 per share.
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wsls.comCitigroup's financial results echoed this trend, highlighting a robust consumer spending environment and healthy deal-making activities across the banking sector.
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courthousenews.comDespite the positive financial outlook, the banks are now at odds with Trump, who recently proposed capping credit card interest rates at 10%.This proposal has raised concerns among bank executives, who argue that such a cap would limit credit availability for consumers who need it most and could have detrimental effects on the economy.
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courthousenews.comwsls.comMark Mason, Citigroup's CFO, emphasized that while affordability is a significant issue, an interest rate cap is not a viable solution.
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wsls.comThe banks had previously enjoyed a favorable relationship with the Trump administration, benefiting from tax cuts and a deregulatory agenda that facilitated their operations.However, the current conflict over interest rates marks a significant shift in this dynamic.
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courthousenews.comTrump has also supported investigations into Jerome Powell, the chairman of the Federal Reserve, which bankers view as a threat to the central bank's independence.
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wsls.comBank executives have expressed confidence in the resilience of the US economy, despite potential risks.Brian Moynihan, CEO of Bank of America, stated that both businesses and consumers are proving resilient, and he remains optimistic about the economic outlook for 2026.
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courthousenews.comThis sentiment is echoed by Mason, who noted that the economy has managed uncertainty effectively, although geopolitical risks remain a concern.
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wsls.comIn terms of consumer behavior, banks are not observing signs of a "K-Shaped" recovery, where wealth disparities widen.Instead, metrics such as delinquencies and charge-offs remain stable, indicating that consumers are maintaining their financial health.
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courthousenews.comBank of America reported a 6% increase in credit and debit card spending, with credit card balances rising to $103 billion, while Wells Fargo also noted stable credit metrics and consumer loan growth.
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wsls.comAs the banks navigate these challenges, they continue to focus on collaboration with the administration to address affordability issues without imposing restrictive measures that could hinder economic growth.
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courthousenews.comThe ongoing dialogue between the banking sector and the White House will be crucial in shaping the future of credit policies and the overall economic landscape in the US.
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wsls.comIn conclusion, while big banks are currently enjoying record profits, the emerging tensions with the Trump administration over credit card interest rates could pose significant challenges ahead.The outcome of this conflict may have lasting implications for both the banking industry and consumers alike.
