Last year, President Obama signed into law the Credit Card Accountability and Disclosure Act of 2009, which includes many provisions that go into effect Feb. 22. The intent of the Card Act was to establish fair and transparent practices pertaining to credits cards. At Zions Bank we have always believed in treating our clients fairly and we welcome this type of legislation.
While the Card Act has resulted in significant changes for many card issuers, the impact to Zions Bank has been minimal since we have never engaged in the “unfair and deceptive” practices addressed in this new law. Let me share with you a few examples of how we’ve approached some of the issues addressed in the Card Act over the years.
Universal Default – The Card Act eliminates “universal default,” which occurs when issuers increase interest rates for clients who miss a payment on any other account. The average default rate in the U.S. is nearly 29 percent, and 90 percent of the credit cards in the country have penalty rates. Zions Bank has never practiced universal default. In fact, we don’t have any default or penalty rate pricing.
Time to Pay – The Card Act mandates that cardholders must be mailed their statements 21 days before the due date. Zions Bank’s statements have always been mailed at least 21 days before the due date. In addition, Zions Bank consumer cardholders have a full 25-day grace period to pay their balance before interest is charged on new purchases.
Rate Increases – Cardholders are protected against arbitrary interest rate increases under the provisions in the Card Act. Zions Bank does not increase interest rates arbitrarily. In fact, the last time Zions Bank raised interest rates on new credit card purchases was July 2006, since our credit card interest rates are tied to the Prime Rate. As the Prime Rate started dropping in late 2006, all of our interest rates for purchases have come down and have stayed at record lows since December 2008. (Note: Credit card interest rates in the U.S. currently average 14 percent. Zions Bank’s rates are between 7 percent and 12.25 percent on new purchases.)
Allocation of Payments – The Card Act states that cardholders must receive fair allocation of their payments to different balance rates. Ninety-five percent of cards allow issuers to apply payments in a manner that the Federal Reserve found “likely to cause substantial monetary injury to consumers.” Zions Bank allocates payments fairly to different balance rates.
Double-Cycle Billing – Under the provisions in the Card Act, issuers are prohibited from double-cycle billing, a practice that hurts cardholders who pay off their balances in full in one statement cycle, but not the next. Zions Bank has never practiced double-cycle billing.
Zions Bank’s Guiding Principles state that our goal is to create value. These principles also state that we will conduct our business with integrity and decency and will strive to treat our customers with respect and appreciation. At a time when many of our competitors need to make significant changes in their credit card practices, I am proud of the fact that the newly legislated practices of fairness and transparency are the practices we have followed for years.
To our clients, our communities, our employees and our shareholders, this serves as yet another example that we haven’t forgotten who keeps us in business.
View Zions Bank’s credit and debit card options.
Scott Anderson is president and CEO of Zions Bank
Featured in the January/February 2010 issue of Zions Bank’s Community magazine.
That’s nice. The company attitude is the real reason I keep doing business with Zions. With the conventional wisdom steering people away from big banks and towards community banks in order to get quality, personal service with fair and considerate business practices, it’s nice Zions has always tried to treat its customers like human beings.
While Zions may be above board with some of the unscrupulous activities that have been going on in the financial economy, it must be remembered that laws and rules come about because someone was unethical…….in this case other banks.
I’m bothered by the fact that our economy has migrated away from a real economy and into a services and financial economy. I’m not happy with the fact that so much of the S&P500 is made of financial companies compared to decades ago.
Financial companies generate no real wealth. They are a subset of the real economy…..which has been in decline for decades. It use to be that it was common for GDP in the 7% range. Now its a good quarter if its just 3%. The whole country is in decline. There is no way the U.S. ever pays back its debt thus we can count on the continual debasing of the currency.
These financial bubbles are nothing but manifestations of a fiat currency, fractional reserve banking and a debt based money system that has an end life to it.
The banks pay us 1% to put our money in there. The Fed and its reckless control of interest rates has created speculators out of everyone. I feel like the biggest fool leaving my money in the bank when it should be in gold.
Thanks for the info on the credit card problem. We have just canceled our Chase Cards and are planning to continue to use Zions bank cards because we can trust you.
Sincerely,
John M. J.
I have been a Zions Bank customer for over 20 years and have no intention of switching banks. This list of issues listed in this article regarding Obama’s Credit Card Acxt and how Zion has treated its customers truely is a reminder that you haven’t forgotten who keeps you in business. Way to go!
Marty
Thanks for running your business in an ethical way. This was a very helpful explanation of your policies. Good work!
Thank you for your manner of doing business! We appreciate the way your employees have always treated us with fairness and concern, explaining how we can manage our finances to our advantage, not to yours. Luann Petersen and Mike Wallace in the Logan 14th North Branch are true gems and have been a great asset to us. We intend on dealing with Zions Bank for years to come.
Thanks Again,
Michelle S.
Thanks Zions Bank for looking after your Customers.
Steve//
If this is so, why was I charged $25.00 overdraft fees for small purchases I made, and was then unexpectedly admitted to the hospital for a serious medical emergency?
Do you think this is a fair way to treat a customer of 13 years? I know it is legal. Is it moral?
So, before you blow your horn too loudly, please consider the totality of your practices. Regardless of your response, I will remain loyal to Zions Bank because I have friends who are executives with the bank.
Thanks for listening.
Fred G.
It is no surprise that Zions Bank is not involved in issues related to unfair interest rates and unfair practices related Zions charge cards. I want to take tis opportunity to congratulate Zions for the very professional way you have handled our charge card. We have received calls if there is a question regarding a charge when we are out of town, have had immediate follow up when a charge has been entered on our account in error and have very positive and accurate responses when we call with a question. We want to specifically recognize Matt Mabey, who works with the Private Banking Department located at your bank on Foothill. He is pleasant, responsive, and extremely knowledgeable about our account. You are fortunate to have him on your team.
Scott,
Great message – articulate & succinct.
Some issuers deserve to be reigned in.
If I’d known I’d see $5 & $6 ATM surcharges (which will eventually screw that up for everybody too), I may not have sued Visa&Plus so vigoriously.
Hope life’s good for you.
Dick
Thanks Scott. I just saw a PBS frontline special last night and was horrified to learn about how many Credit Card company’s have been deceiving the public, charging outrageous fees and interest rates, and have been hurting the most economically vulnerable. It is nice to hear about a company that does the right thing even when no one is watching.
Thank you Nevada State Bank. I have banked with all of the big banks over many years and have always had some problem which angered me enough to change banks. however over the last 10 + years NOT ONCE have I had an issue with NSB I would like you to know that I am very pleased with the way business is conducted at NSB and the best staff I have ever worked with. I recommend your bank to anyone that is having issues with their financial institution.
It’s no mystery that Wall St. is mismanaged and has been for the decades that I’ve been alive. Considering history it may have alwasys been so. There is no reason for Wall St.to change when they are thier losses are socialized and profits prvatized. Even with socialized losses Wall St. is arrogant and takes government, public funds to reward itself with public monies and boasts about its financial genius. It doesn’t take a genius to borrow fiat money, newly printed without basis, at virutally 0% and simply buy even government bonds at 3.5% and make money. Wall St. believes that American Society is created to serve Wall St., the private good at public expense. The legitimate function of capital markets is to serve the public and provides the means by which private investors can channel their capital to those services and goods which serve the society. This process alone provides enough opportunity for corruption. This also allows decentralization for decision making purposes as opposed to the cnetralized system which is now in place, the Wall St. Wash. DC axis of evil.
Thanks for the information. I’ve heard about this Act but never heard what it really meant until your email.
Fred G–Watching that I don’t over draw my account is my personal responsibility. That there is a fee, if I do, is well understood. How does the bank know when someone is in the hospital! I’ve had a very good response from Zion’s Bank when I’ve shared any extenuating circumstances. They’ve been understanding. But if its my own fault, I take the consequences and learn a lesson. Thanks for the great service, Zion’s Bank. And remember, the tellers don’t make the rules. Don’t take it out on them.