Credit Card Regulatory Solutions

In February 2014, the CFPB encouraged large Credit Card issuers and Financial Institutions across the U.S. to provide free credit scores and educational programs to consumers on their monthly statements or online banking portal.

Competition in the credit card industry in today's economic environment is fierce. Consumer expectations and buying patterns have changed dramatically, and card issuers are constantly looking for ways to hold onto good customers, build new account relationships and move cardholders away from paper statements to online accounts.

With Scores in Online Banking, card issuers provide a valuable service to online banking customers with a convenient way to monitor and better understand their credit score.

In order to help protect consumers from incurring unaffordable levels of credit card debt, the Credit Card Act requires that, before opening a new credit card account or increasing the credit limit on an existing account, card issuers must consider a consumer's ability to make the required payments on the account.

Confirming a consumer's income, knowing their debt component, account management after a customer's income changes and making proactive credit line increases at the appropriate time based on income verification, continues to prove challenging for credit card issuers. Card issuers need additional predictive measures that supplement, complement, and enhance rather than duplicate credit data.

Our Ability-to-Pay suite features a more complete view of a consumer's assets and obligations as well as turnkey solutions to provide the debt-to-income and debt-to-assets ratios, as well as the residual income measures required under Regulation Z.

The Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act) changed the landscape of the credit card market. The CARD Act was enacted to "establish fair and transparent practices related to the extension of credit" in this market, regulating both the underwriting and pricing of credit card accounts.

The CARD Act has impacted the way that consumers pay for credit and has enhanced transparency for credit card customers. Over limit fees and re-pricing actions have largely been eliminated, and card issuers are feeling those effects as a result of the CARD Act. The dollar amount of late fees is down as well, and the CARD Act has helped to cause that reduction.

Our time-series, trade-level credit attributes help capture credit behavior including spend, payment and utilization for the previous 24 months, which gives customers actionable consumer insight for more precise targeting and stronger marketing strategies that can help drive increased revenue.

The Comprehensive Capital Analysis and Review (CCAR) and Dodd-Frank Act (DFA) stress tests are regulatory tools the Federal Reserve uses to ensure that financial institutions have robust capital planning processes and adequate capital. 

Due to the recent Great Recession, banks that previously appeared well capitalized, were suddenly not, in part because there were no forward looking views at an adverse economic state. Regulators realized that they needed to take a different look at how financial institutions are capitalized and for new ways to adequately test bank capitalization in order to avoid bailouts and reduce the risk of catastrophic failures.

Our solutions give customers industry data needed to help them quantify where, how and why they are different from the overall industry and why their stress test results may differ from industry benchmarks. Additionally, customers can leverage the stress test analysis we help them perform to reveal additional marketing opportunities.

Banks routinely use models for a broad range of activities, including: underwriting credit, valuing exposures, instruments, and positions, measuring risk, managing and safeguarding client assets, and determining capital and reserve adequacy. In recent years, banks have applied models to more complex products and with more ambitious scope, such as enterprise-wide risk measurement. Model risk should be managed like other types of risk.

The process to re-code, re-test and audit models is cumbersome and prone to numerous errors. In addition, financial institutions continue to struggle with how to pull vast amounts of their data along with data from other sources and putting them to use in decisioning systems.

Our suite of advanced tools help customers deploy, audit, integrate and execute predictive models with greater ease at a lower cost for more consistent decisions, outcomes and business performance, regardless of the credit source used.