Unlock the White House Watch newsletter for free
Your guide to what Trump’s second term means for Washington, business and the world
In a three-day period this week, US President Donald Trump sued JPMorgan and its chief executive, snubbed the head of Bank of America and doubled down on capping credit card interest rates, an industry cash cow.
The chaotic week encapsulated the experience of US lenders in Trump’s second term: executives are caught in a jarring contrast, balancing the constant risk of his ire against the benefits of the most bank-friendly policy agenda since the financial crisis.
“You’ve got the minions rowing in a direction that’s largely good for the banks but then you have this randomness at the top,” said Anil Kashyap, an economics and finance professor at the University of Chicago’s Booth School of Business, who has advised the Federal Reserve and the Bank of England.
“You just can’t model what the president’s going to say. And it’s very difficult to describe it in a simple coherent rational framework.”
The early weeks of 2026 have deflated the industry’s hopes that the second year of Trump’s second term would be less frenetic than the first.
“This is the price we’ve got to pay. There’s no free lunch,” said one Wall Street financier.
Bank of America and JPMorgan declined to comment. A White House spokesperson said Trump’s decision-making is guided by “the best interest of the American people”.
In any other era, an incumbent president suing his country’s largest bank and its CEO for billions of dollars would have been a seismic event. But on Thursday, it barely registered with JPMorgan’s investors. Its shares closed marginally higher, in line with the broader S&P 500.
The lawsuit, which JPMorgan said “has no merit”, alleges the bank unfairly closed Trump’s accounts for political reasons and that CEO Jamie Dimon included the president and his companies on a “blacklist” for customers with a history of shady dealings.
Unlike Bank of America CEO Brian Moynihan, Dimon was granted an invitation to Trump’s event in Davos, Switzerland, the day before the lawsuit was filed. However, Dimon left the shindig before the president, who was running late, to attend a JPMorgan event.
Wall Street banks have universally cheered the administration’s appointees to lead regulatory agencies — Michelle Bowman as the Fed’s vice-chair of supervision, Jonathan Gould at the Office of the Comptroller of the Currency and Travis Hill at the Federal Deposit Insurance Corporation.
In Trump’s first year back in office, regulators proposed allowing higher leverage at the largest US banks, loosened some criteria in stress tests to determine capital requirements and rescinded lending guidance for riskier loans.
The moves have helped buck what some in finance view as an era of financial repression in the aftermath of the crisis. The reforms were designed to ensure banks were safer and unable to take risks that endangered the economy. But executives believe they have gone too far.
“There’s always going to be twists and turns,” said Amanda Eversole, CEO of the Financial Services Forum, a lobby group representing the largest US banks. “But I look at the bigger picture, and this is an administration that understands a powerful economy is good for the country.”
Banks’ share prices have soared on Trump’s deregulatory agenda, with the expectation of more leniency to come, as the industry awaits the White House’s plans for capital requirements under the Basel III accord.
A lighter approach to antitrust enforcement than during Joe Biden’s administration is also facilitating more dealmaking, boosting Wall Street’s investment banking business. But lenders have to navigate an environment where there is a desire to keep one’s head down to avoid unwanted attention from Trump.
“Stay out of the papers. Don’t be quoted a lot,” said one senior official at a Wall Street bank.
One risk is that Trump uses this deregulatory agenda as leverage with banks if they do not take action in line with his priorities.
Asked at the World Economic Forum this week for his reaction to forecasts that Trump’s desired 10 per cent cap on credit card loans would cut into bank earnings, Treasury secretary Scott Bessent responded: “We have done a lot to deregulate banks. Their earnings are way up. More importantly, it has increased their lending capacity.”
In an attempt to meet the administration halfway, BofA and Citi are exploring new products around affordability and consumer credit, said people familiar with the matter.
“You’re going to have this sword over your head for the next few years,” said the Booth School’s Kashyap. “It’s still too early to tell whether all these business leaders are going to be happy in the end with the way this winds up.”
Additional reporting by James Politi