A recent analysis from Citigroup outlines a potential advantage for U.S.-based fintech companies due to Washington's pivot toward a populist and affordability-driven policy framework ahead of the November 2026 midterm elections. This policy shift, propelled by President Donald Trump's ongoing emphasis on making financial products more accessible and affordable, is influencing investor sentiment across financial services.
The brokerage firm forecasts that fintech companies offering consumer-oriented credit solutions and services for small businesses stand to gain in this environment. Notably, buy-now, pay-later providers such as Affirm and Klarna, alongside fintech players like SoFi and Block, are highlighted as well-positioned beneficiaries. Additionally, Citigroup's assessment extends to include tech-driven companies serving the restaurant and e-commerce sectors, naming Toast and Shopify as possible winners under the evolving policy landscape.
Following Trump's assumption of office in 2025, traditional lenders experienced an uptick fueled by expectations of regulatory easing. However, Citi's note signals that Trump's renewed focus on affordability may realign attention and capital flows toward fintech challengers rather than incumbents.
Market performance in 2025 for these fintech firms was varied: SoFi's shares appreciated approximately 70%, Affirm’s climbed over 22%, while Block's shares declined by more than 23%, underperforming its fintech peers and the Nasdaq Composite index, which rose roughly 20.4% during the same time frame. The underperformance of Block appears linked to investor concerns regarding growth trajectories and competitive pressures within payments.
Citi emphasizes that a rise in populism, as embodied in affordability-centered policies ahead of the midterm elections, bolsters the appeal for companies delivering lower-cost, user-friendly lending tools and small-business services. This trend aligns with President Trump's recent policy actions, including his call to cap credit card interest rates at 10% for one year, a proposal that met resistance from major banking industry figures like Jamie Dimon, CEO of JPMorgan Chase.
Furthermore, the President signed an executive order targeting reduced competition from large institutional investors in the housing market to benefit individual homebuyers, reinforcing the affordability agenda. Citi suggests this regulatory environment potentially advantages smaller fintech firms competing in consumer credit and housing finance sectors.