Groups on Credit Card Lending Tactics

Posted on June 25, 2009
Filed Under Advice, American Express, Chase Cards, CitiBank | Leave a Comment

An investor advocacy group and mutual fund firm with a focus on corporate responsibility are spreading the word about predatory lending resolutions they’ve helped to place on the proxy statements of three large banks.

Goshen, Ind.-based MMA Praxis Mutual Funds and New York-based Interfaith Center on Corporate Responsibility have placed resolutions on the proxy statements of Citigroup Inc. (NYSE: C), JPMorgan Chase & Co. (NYSE: JPM) and Bank of America Corp. (NYSE: BAC) demanding the banks address issues related to credit card lending practices.

The two groups held a conference call April 16 that included their own officials as well as representatives from consumer advocacy groups the Center for Responsible Lending and Consumer Action.

MMA and the Interfaith Center are asking the companies to complete a report to shareholders evaluating each company’s credit card lending, marketing and collection processes and the impact those policies may have on borrowers.

The groups hope the companies will shed light on any practices that could be considered predatory or abusive, including “universal default policies, bait-and-swtich marketing tactics, hidden fees and intentionally complicated cardholder agreements,” wrote MMA Praxis in a media release.

“Citigroup, JPMorgan Chase and Bank of America drive more than 60 percent of the credit card business in the United states,” MMA Praxis wrote. “Their past practices, intentional or not, played a significant role in shaping the over-leveraged consumer lending environment we have today.”

The Chase board is recommending a vote against the proposal.

“We do not engage in the practices cited by the proponents as ‘predatory,’” Chase wrote in its proxy statement.

by Adrian Burns

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