@Anonymous wrote:In another thread I had mentioned that I was having lunch with a friend who is a SR VP (US BANK) and that I was looking forward to it because he has been back in Cincinnatti, OH for a week, attending a seminar on new Credit Card policies the bank would be implementing.
This seminar he attended was of particular interest to me because he said the cheif speakers were coming from the gaming industry, as US BANK had seen that the gaming business has historically had significant lower losses in the area of credit then any bank.
For those of you who do not know I am retired from the gaming industry and the last 16 years of my employment I was involved in making credit decisions to players, so I have a little knowledge of how the gaming industry approcaches it.
He stated that first off, US BANK plans on REDUCING its UNSECURED CREDIT that is out now to customers by about 30% during the next 6 months.
Another thing they plan on doing is eliminating AUTOMATIC CLI's. He said the new policy will be CLI's will all be done on an individual basis and will be customer initiated.
They plan on EXPANDING their Credit Card base, through a series of cuts to some CL limits. He said that "loss prevention" specialists have stated that they are in a less vulnerable position if instead of 1 customer with a $20,000 CL, they have instead a customer with a $10,000 CL, one with a $5,000 CL, 1 with a $3,000 CL and 1 with a $2,000 CL.
Instead on variable interest rates, they will be setting up a "tiered" system of rates, PROBABLY 8.9%, 11.9%, 14.9% and 17.9% depending on a persons credit profile and payment patterns. Of course all CASH EQUIVILENT TRANSACTIONS will be at the highest rate.
They are looking at their credit reporting practices and ways to save money. Perhaps not reporting cards with zero balances or only reporting every 2 months.
He also stated that they are looking at other forms of info, then the "traditional credit score" to determine extensions of credit.
Also, he said they plan on working closer with other financial institutions in sharing of info (THIS IS THE KEY POINT, he told me they learn from the gaming people).
He said more then anything he was PLEASED with the overall tone of the meetings. Through it he learned that YES, credit will still be available to those who deserve it, BUT they will not be "throwing" it at people like was the practice before and has led to the financial conditions we are in at this time.
What he said was most bothersome is that it is the consensus of everyone there that the "Credit Bubble" has not reached it's WORSE YET and many more losses are coming due. That is why RESPONSIBLE BANKS and CREDIT CARD ISSUERS are making changes to insure there business survives.
Just wanted to share what we talked about. There may not be anything I said that most of you do not already know, but perhaps some of it will be intesesting.
OH and he did say that they had hired 17 people from the gaming industry, to work in the areas of "Account Fulfillment" and "Loss Prevention".
Maybe us old "casino rats" are useful afterall
ok if this is based on the Payment amount of the payment like tdbank does. but what I hearing this, it teirs will based on whims of a payment pattern the lender whats to see,in which case they have define hard rules when highe teirs well be appled such as teir 3
hightest if you util has been 50% for six months or more.
Credit-Wise wrote:
... this will make us more competitive for the slaughter that is upon us.
Reminds me of the joke about the two hikers and the bear, and whether they could outrun the bear. All that matters is that one hiker can outrun the other hiker!
(tough on the other hiker, of course)
DickC wrote:
We just have to realize there will be changes coming. I am sure that many people will "over dramatize" them, BUT, my theory is if you pay your bills, are not late, don't exceed your credit limits nor keep looking for credit you have no practical use for, you will be fine.
But let's extend this not-reporting-$0-balance-cards idea: what if all the banks start doing this? and the credit unions? Many people have an occasional balance reporting on a card, which they then pay off. The less-neurotic members here let all their cards report and then PIF, not worrying about what happens to their scores, as they aren't shopping for credit.
If $0 balance cards aren't reported, we'll always be getting dinged for "too many accounts with balances."
The point is, the FICO scoring system takes into account current credit reporting practices. If these practices are changed, the FICO fomulas will be using insufficient and/or incorrect data to assign risk scores, AKA our FICO's.
I've had lots of CSR's review soft inq reports while on the phone with me, and I like having them say, "Wow, you don't have any debt at all! You really know how to handle your credit cards." By golly, I want that string of $0's to continue to report.
How 'bout they find a way to cut costs that doesn't negatively impact good consumers...