The new federal regulations overhauling credit card industry practices seemed radical, until President Obama signed a law in May that upped the ante in terms of timing and restrictions, and then in June proposed the Consumer Financial Protection Agency. Either alone represent a sea change for card lenders, requiring them, as the American Bankers Association puts it, "to overhaul their entire business models, eliminate specific practices, and reconstruct the way they extend credit and interact with customers."

"Overhauling" and "reconstructing" have technology implications, but not always good ones. What will happen with the proposed new regulator is unknown - every bank lobby in the country opposes the idea. But the card law is a done deal, and represents such a major short-term challenge for lenders' technology operations that one banker told MasterCard Advisors that compliance could absorb as much as 70 percent of the coming year's IT resources at his institution. Everything from customer service technologies, billing and payment processing systems, disclosure processes, and pricing models must all be rewritten or replaced. Best guess is that most lenders will band-aid existing systems to meet the deadline - or face stiff fines - and overhaul down the road. "When you combine that the changes affect every part of the process, and when every part of the process involves technology, it's going to be a drastic and very burdensome thing for IT departments," says Michael Brauneis, director of regulatory risk consulting at Protiviti.

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