Office of Thrift Supervision

Federal Financial Institution Regulators Draft Guidance on Credit Card Lending

Board of Governors of the Federal Reserve System
Federal Deposit Insurance Corporation
Office of the Comptroller of the Currency
Office of Thrift Supervision

The draft guidance would apply to all institutions under the agencies' supervision that offer credit card programs. It describes the agencies' expectations for prudent risk management practices for credit card activities, particularly with regard to credit line management, over-limit accounts, and workouts. The draft guidance also addresses income recognition and loss allowance practices for credit card lending.

The agencies recognize that some institutions may require time to implement changes in policies, practices, and systems in order to achieve full consistency with the credit card guidance. Such institutions would be expected to work with their primary federal regulator to ensure implementation of needed changes as promptly as possible after the issuance of the guidance. With respect to those elements of the guidance that reflect existing, longstanding regulatory reporting requirements, the agencies’ expect, as always, continued and ongoing compliance.

As the agencies complete their review of the draft document, they are interested in the views of affected institutions and other interested parties as to whether the draft provides clear guidance concerning the agencies' expectations in the areas of credit card account management, risk management, and loss allowance practices or, instead, has "fatal flaws" in these areas. Institutions and other parties that choose to respond should provide their views electronically no later than 5:00 p.m. on August 9, 2002. Responses to the agencies should be submitted electronically to the FFIEC Web site, www.FFIEC.gov (click on the option ffiec-suggest@frb.gov). The responses may also be submitted directly to ffiec-suggest@frb.gov.

Media Contacts:
Federal Reserve          Dave Skidmor      (202) 452-2955
FDIC                         Frank Gresock     (202) 898-6634
OCC                         Bob Garsson        (202) 874-5770
OTS                         Chris Smith         (202) 906-6677

Attachment:

Draft Guidance on Credit Card Lending <

The Office of Thrift Supervision (OTS), a bureau of the U.S. Treasury, regulates and supervises the nation's thrift industry. OTS's mission is to ensure the safety and soundness of thrift institutions and to support their role as home mortgage lenders and providers of other community credit and financial services. For copies of news releases or other documents visit the OTS web page at www.ots.treas.gov.

Created: Monday, 7/22/2002