Tyler Crowe

There's some obvious things we need to consider as an investor when thinking about something like how changes to credit card environment would change a lot of companies.

First and foremost is, what are the chances of this happening?

for us as investors?

If so, what are the potential outcomes?

For now, let's focus on the potential outcomes aspect.

I think that's a good discussion for us to have here.

A little scenario, planning, game-playing, however you want to put it.

Matt, if we put this into the scenario of it actually happening, how does this look on paper?

Yeah, the people who don't carry a credit card balance but benefit from all those perks are a little bit of a loss for a lot of credit card companies.

Certainly, one of the things you could see going away pretty quick.

To be honest, and I'm a little dubious of the practicality of this as well, we actually saw something relatively similar try to get implemented during the Biden administration back, I think, 2022, 2023.

They tried to cap interest rates on payday lending using the Consumer Financial Protection Bureau.

But instead of delivering interest rate savings to the borrowers who are using payday lending or other small-sum, short-term, uncollateralized loan products,

It just made payday lenders much more selective in terms of credit rating and the ability to get people payback because they wanted to lower their counterparty credit risk rather than benevolently give up interest rates.

I struggled to see a different outcome in credit cards than what we saw in payday lending, even though payday lending is a much, much smaller business than credit cards.

That said, John, as you mentioned in our pre-show planning, there are some people that say, look, this can work, it will work, and it's not just consumer advocates.

Yeah, certainly the buy-now-pay-later proliferation might make it, again, trying not to inject too much of my own thoughts into it, but again, I'm dubious, but having the proliferation of buy-now-pay-later might be able to help thread the needle with something like this here.

John seems a little bit more on board with buy now, pay later as companies to watch should this happen.

Matt, I know you're a buy now, pay later fan as well.

But again, not considering the probability of this actually happening, what are some of the banks specifically, the traditional bank credit card companies that you see would be more affected than others?