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A handful of investor groups this week will urge several of the nation's top credit card issuers to adopt shareholder resolutions to end certain card industry practices the investor groups deem "predatory" and harmful to long-term profitability. The groups, classified as faith-based and socially responsible, said last week they intend to file non-binding resolutions at the annual meetings of Bank of America Corp., Citigroup Inc. and JPMorgan Chase & Co. The goal is to put the spotlight on certain widespread card-industry business practices the groups consider harmful to society and to the long-term health of investors' portfolios. The investor groups' representatives also will read aloud shareholder statements at the annual meetings of American Express Co., Wells Fargo & Co., Discover Financial Services and Capital One Financial Corp. The various shareholder resolutions and statements include appeals to credit card companies' management teams to end "tactics that include universal default policies, bait-and-switch marketing tactics, hidden fees, and intentionally complicated cardholder agreements," Mark A. Regier, manager of stewardship investing services at Goshen, Ind.-based MMA Praxis Mutual Funds, said in a statement. MMA, founded in 1945 as Mennonite Mutual Aid, is spearheading the initiative with the New York-based Interfaith Center on Corporate Responsibility, a coalition of 275 faith-based institutional investor groups including religious organizations whose combined portfolios exceed $100 billion. Regier, the lead filer of the Chase resolution, said a key goal of the shareholder resolutions is to prompt the nation's top card issuers to voluntarily end certain industry practices by July 1, 2010, when new credit card rules go into effect. The Federal Reserve and other regulators in December finalized new rules THAT would prohibit card issuers from repricing cardholders' existing debt, except in certain circumstances. "We ask (card issuers) to stand with the American people in the difficult months ahead by putting an immediate end to non-default repricing of existing balances. This will anticipate the new Federal regulations to be implemented by July 2010," Regier tells CardLine. Adam Kanzer, managing director and general counsel at New York-based Domini Social Investments LLC and lead filer for BofA resolution, said in a statement: "We're asking the boards of the major credit card issuers to carefully assess their policies to determine if their companies could be playing a more positive role. As investors, it is clear to us that the current path is unsustainable."
