2/15/04 4:00 PM
Third Circuit’s Decision in Roberts v. Fleet Bank:
Thinking Outside of the “Schumer Box” or “Consumerism Gone
Since the mid-1980’s, banks have become dependent on
non-interest income, such as credit card and banking-related fees.1
In fact, nearly half of the operating income of many commercial
banks is derived from non-interest income.2 Consequently, credit
card issuers fiercely compete to win a greater market share by
aggressive marketing techniques.3 “Pre-approved” credit card
solicitations offering “low introductory” interest rates4 or no
annual fees are commonplace in America’s mailboxes.5 Consumer
activists refer to these offers as “bait and switch” or “shark in the
mailbox” tactics that are designed to trick the unwary consumer.6
Credit card marketing efforts have intensified over the past
decade.7 In 1990, 1.1 billion credit card solicitations assailed
1. Future of Banking: Financial Modernization is Occurring Apace Without
New Legislation, 15 BANKING POL’Y REP., July 1, 1996, at 9-10. See also Julie L.
Williams, Before the Mid-Atlantic Bank Compliance Conference (March 22, 2002),
available at http://www.occ.treas.gov/ftp/release/2002-30a.doc [hereinafter Williams].
Examples of credit card fees are late payment fees, over-the-limit fees, or annual
membership fees; however, banking fees are commissions, application fees, or loan
origination fees. Press Release, Federal Deposit Insurance Corporation, Credit Card
Fees Often Go Unnoticed Even As They Increase (June 4, 2001), available at
2. Williams, supra note 1.
4. “Introductory interest rate,” or “teaser rate,” is a credit card interest rate that
increases to a higher interest rate after a period specified in the cardholder
agreement. See In re Advanta Corp. Securities Litigation, 180 F.3d 525, 528 (3d Cir.
5. Guidance on Unfair or Deceptive Acts or Practices, Advisory Letter AL