Mark J. Furletti

Credit Card Pricing Developments and their Disclosure

Public data, proprietary issuer data, and data collected by the author from a review of over 150 lender-borrower contracts from 15 of the largest issuers in the U.S. suggest that, over the past 10 years, credit card issuers have drastically changed the way that they price their product. This paper outlines the history and dynamics of credit card pricing over the past 10 years and examines how new pricing methods are addressed by current regulatory disclosure requirements.

Another Look at Credit Card Pricing and its Disclosure: Is the Semi-Annual Pricing Data Reported by Credit Card Issuers to the Fed Helpful to Consumers or Researchers?

Credit Card Pricing Developments and Their Disclosure,” a January 2003 Payment Cards Center Discussion Paper, examined the history and dynamics of credit card pricing and how such pricing is described to consumers in Truth in Lending solicitation disclosures. In this paper, we examine credit card pricing as revealed to consumers in a different context: that of a semiannual shopping guide that the Board of Governors publishes pursuant to the Truth in Lending Act. Specifically, we ask two questions: Are the data on credit card pricing in the guide useful to consumers? Are the data collected for the guide (commonly known as Terms of Credit Card Plan [TCCP] data) of value to researchers? With respect to both of these questions, we find that the data are becoming less useful.

Mandatory Arbitration Clauses in the Credit Card Industry

On September 26, 2002, the Payment Cards Center of the Federal Reserve Bank of Philadelphia held a workshop that explored the use of mandatory arbitration clauses in credit card agreements between issuers and consumers. Leading the workshop was Alan S. Kaplinsky, chair of the Consumer Financial Services Group at Ballard Spahr Andrews & Ingersoll, LLP. A pioneer in the development of consumer arbitration clauses, Kaplinsky described the arbitration process as a conflict resolution mechanism in the payment cards industry. He also provided a contextual overview of the Federal Arbitration Act of 1925, subsequent legislative actions, and relevant court cases. This paper summarizes his presentation and the ensuing discussion with workshop participants.

Payment system regulation and how it causes consumer confusion

On October 14, 2004, the Payment Cards Center hosted a workshop led by Professor Mark Budnitz of Georgia State University School of Law. Budnitz, the author of four books and many Law Review articles on consumer payments, described how the current regime of consumer payment regulation and various new payment products have led to much confusion among consumers. He also discussed a remedy for this situation: the adoption of uniform federal consumer protection standards. This paper summarizes the workshop and is organized around two of Budnitz’s key assertions: (1) the current regulatory environment is confusing for consumers and (2) there is a need for more uniform consumer protection standards.