President Donald Trump floated a proposal that sounds simple enough: cap credit card interest rates at 10% for a year. Wall Street's response? A collective yawn, according to CNBC's Jim Cramer, who broke down why investors aren't taking the idea seriously and why ordinary Americans might actually suffer if it somehow became reality.

The Proposal That Nobody Believes Will Happen

Speaking on "Mad Money" Monday, Cramer explained that Trump "decided that credit card companies will have to cap rates at 10% for a year," but there's a rather significant catch: Congress would need to pass actual legislation to make it happen. Without that, Trump's only play would be attempting to "browbeat" bank executives into voluntarily complying with the directive by January 20, 2026.

Here's the thing though. The market barely flinched. Bank stocks opened lower on the news but recovered throughout the trading session. "Wall Street just doesn't seem to care," Cramer observed, "because it's too over the top."

In other words, investors are betting this is political theater rather than serious policy. The idea is so extreme and would require such significant Congressional action that traders simply aren't pricing in any real probability of it happening.

The Unintended Consequences Nobody's Talking About

But Cramer didn't stop at explaining Wall Street's indifference. He pivoted to what would actually happen if somehow this proposal became law, and it's not pretty for the people it's presumably trying to help.

"If we actually cap credit card interest rates at 10%, the real victims would probably be the millions of Americans who [would] no longer be able to borrow money," Cramer said.

The logic is straightforward: lenders charge higher interest rates to riskier borrowers because those loans have a higher probability of default. If you cap rates at 10%, the math simply doesn't work for issuing credit to people with lower credit scores. "These companies simply won't lend to any of them unless they can get superpotent interest rates," Cramer explained.

The ripple effects could extend beyond just credit cards. Cramer warned about broader economic damage if credit suddenly becomes unavailable to millions of consumers. "You'd just be mandating a crash if these companies stop lending," he cautioned.

How Bank Stocks Actually Performed

Despite the market's apparent dismissal of the proposal's likelihood, banking stocks still finished Monday in negative territory. Capital One Financial Corp. (COF), which generates the bulk of its revenue from credit card operations, took the hardest hit among major players.

The banking industry wasted no time voicing concerns. A coalition of major banking organizations including the Bank Policy Institute, American Bankers Association, Consumer Bankers Association, Financial Services Forum, and Independent Community Bankers of America issued a joint statement warning that the proposal could severely limit credit availability for consumers.

So we're left with an interesting situation: a policy proposal that Wall Street doesn't believe will happen, but that the banking industry still felt compelled to formally oppose. And if it somehow did become reality, the people it's designed to help would likely be the ones most hurt by losing access to credit entirely. Sometimes the most politically appealing ideas have the messiest real-world consequences.