OCC Advisory on Credit Card Practices-AL-2004-10

ABC

The OCC advisory on credit card practices-AL-2004-10 provides guidance to banks on credit card practices to ensure fair treatment of consumers. The following practices are addressed in the guidance:

A. "Up-to" marketing: This practice refers to marketing language that suggests a range of credit limits, such as "up to $10,000." The OCC guidance warns that this type of marketing can be misleading and encourages banks to disclose the actual credit limit the consumer is likely to receive.

B. Promotional rate marketing: This practice involves offering consumers a temporary promotional rate, such as 0% APR for the first six months, and then raising the rate after the promotional period ends. The OCC guidance cautions banks to disclose the terms and conditions of the promotional rate clearly and prominently, including when the rate will expire and what the new rate will be.

C. Repricing of accounts and other changes in credit terms: This practice involves changing the interest rate, fees, or other terms of the credit card agreement after the consumer has already opened the account. The OCC guidance emphasizes the importance of providing clear and timely notice of any changes and allowing consumers the opportunity to opt-out of the changes.

D. Lending to insiders: This practice refers to extending credit to bank insiders, such as directors or officers, on terms more favorable than those offered to the general public. The OCC guidance reminds banks of the importance of fair lending practices and the need to avoid any conflicts of interest when lending to insiders.

In summary, the OCC advisory on credit card practices-AL-2004-10 provides guidance on several credit card practices, including marketing language, promotional rates, changes to credit terms, and fair lending practices.