Friday, August 3, 2007
“Gold Standard” Credit Card Principles
Proposed by Congresswoman Carolyn B. Maloney
Chair, Subcommittee on Financial Institutions and Consumer Credit
The following “Gold Standard” Principles provide guidance to credit card issuers. I have provided
some examples of ways in which issuers could implement each principle.
1. Issuers Should Issue Credit Cards on Terms that the Individual Can Repay. Strong
underwriting is key to sound credit. A rigorous and careful underwriting process must be used to
evaluate a potential customer’s ability to handle credit before issuing them a card, and to provide terms
and credit limits appropriate to their situation.
• Eliminate any-time any-reason repricing.
• Eliminate universal default.
• Offer the option of a card with a fixed rate for a fixed period of time.
• Provide cardholders notice of all rate increases, including default and non-default based
increases, and the right to cancel the card and pay off the balance at the original rate.
2. Issuers Should Clearly Explain Account Features, Terms, and Pricing at Relevant Times.
Credit card issuers should provide clear and easily understandable explanation of account terms before
a card is accepted or used, and throughout the customer’s relationship. Although the new Reg Z
addresses disclosure, issuers can and should take steps on their own to improve transparency.
• Provide customers clear information in their statement on how to get a loan payoff balance
unless the balance displayed on the statement is a loan payoff balance.
• Provide cardholders clear notice in advance of what behavior on their part may cause an
interest rate increase and how to return to a lower interest rate.
• Provide easy cardholder access to account specific information, fraud assistance, and live
customer service, including workout assistance, 24-7.
• Provide information on the statement that helps customers understand implications of making