BofA’s Moynihan: Card-Cap Proposal Would Slow Spending

President Donald Trump’s proposal to impose a cap on credit-card interest rates would slow consumer spending and make credit less available, according to Bank of America Corp. Chief Executive Officer Brian Moynihan.

Still, affordability issues are legitimate and the bank has been talking to the administration about that topic, Moynihan said in an interview with Bloomberg Television Thursday at the World Economic Forum in Davos, Switzerland.

“If you actually make this a policy, it can re-allocate credit,” the CEO said. “That will slow down spending, it will slow down credit availability, and that might not be what you’re trying to achieve.”

WATCH: Bank of America CEO Brian Moynihan discusses the company’s work with the White House to solve affordability issues for Americans. He says President Donald Trump’s proposed 10% cap on credit card interest rates may have “an equal but opposite reaction.”

Earlier this month, Trump called for a one-year, 10% cap on credit card rates to go into effect on Jan. 20, a deadline that came and went without many changes from the industry. The president has said his proposal is part of a broader push to reduce costs for Americans. On Wednesday, Trump said he would ask Congress to implement his proposal.

Banks have argued that an interest-rate cap would force lenders to drastically pull back on credit they provide to consumers, leaving them with more expensive and less reliable venues such as payday lenders and pawn shops. Earlier in the week, JPMorgan Chase & Co.’s Jamie Dimon said his firm will give a “real analysis” of the proposal to the government.

“Even one year, if you had to go reshuffle the whole deck, that would be pretty interesting and cause a lot of change in people’s views of what they have available for credit,” Moynihan said.

Read More: Dimon Says Trump’s Card Cap Would Spell ‘Economic Disaster’

In the wide-ranging interview, Moynihan also gave an optimistic outlook for investment banking. This year “we are bullish because the pipelines are full,” he said, adding that “people can get deals done.”

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