The Capital One Story by Mary Curran Hackett

Author:Mary Curran Hackett
Language: eng
Format: epub
Publisher: Harpercollins Leadership
Published: 2020-03-20T00:00:00+00:00

Responding to Regulation Changes

With economic crisis came sweeping changes. In 2008, the Federal Reserve announced a new set of rules regarding lending practices, which were to be implemented across the industry by 2010. While the new rules created substantial costs for most lending institutions, Capital One was able to adapt, and in some cases was completely unaffected. For example, among other practices, the new rules banned the highly criticized practices of double-cycle billing and “universal default” (where issuers increase interest rates because of customer behavior on other loans or changes to credit bureau scores). As far as Fairbank saw it the regulations worked in Capital One’s favor. He proudly reported, “We never engaged in many of the banned practices in the first place, including double-cycle billing and universal default. Years ago we voluntarily introduced the most customer-friendly repricing policy in the industry. We already are well down the path of compliance, having made a number of these changes well before the industry was under a spotlight and before the new rules were even contemplated.”29

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