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The New World of Credit Card Programs

Credit card issuers are truly in new world these days. Just as many were regrouping and updating their programs to address the long-term, recessionary economy which arose in 2007 Congress came along and changed the very ground rules for all credit card issuers. It is not too strong to say that the Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act) has changed the basic premise of issuing unsecured, revolving consumer credit. Due to these major economic and regulatory changes every one of the 4,000 credit unions which issue credit cards has been compelled to update virtually every policy, management technique and reporting structure for their card programs.

That’s the bad news. But in spite of these pressures we have a once-in-a-generation opportunity to make great strides in serving our members and becoming their preferred provider for this particular product. Credit unions have long struggled to make a mark in the credit card segment: we have controlled less than 5% of outstandings nationwide, the largest banks have successfully poached our members, and our scarce resources were often diverted to other products. But right now, believe it or not, it is exactly the right time to make more of our card programs. Our members will benefit and our bottom lines can be strengthened with the right mix of fairness, discipline and commitment.

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