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Credit Card Issuers' Responses toU.S. Legislative ChangesNACHA Payments 2010April 27, 2010ALSTON+BIRD LLP

Credit CARD Act - BackgroundEnacted May 22, 2009• Generally effective February 22, 2010, but certainprovisions effective at other times (August 20, 2009 orAugust 22, 2010)• Principally applies to credit cards but also impactsprepaid/gift cards• Includes 5 TitlesConsumer ProtectionsEnhanced Consumer DisclosuresProtection of Young ConsumersGift CardsMiscellaneous ProvisionsCopyright © 2010 Alston+Bird LLP. Proprietary and Confidential. All rights reserved.3ALSTON+BIRD LLP

Credit CARD Act – Consumer Protections• Requires advance notice of “significant changes” tocardholder agreement terms (including APR increases) –45 days (August 20, 2009)• Payment may not be considered late unless the issuerhas adopted “reasonable procedures” to ensure that theperiodic statement is mailed/delivered at least 21 daysbefore the payment due date (August 20, 2009)Copyright © 2010 Alston+Bird LLP. Proprietary and Confidential. All rights reserved.4ALSTON+BIRD LLP

Credit CARD Act – Consumer Protections(Continued)• Adds conditions to APR/fee increases on future balances(February 22, 2010)None during first year after account is openedPromo rates must be effective for at least 6 months• Prohibits double-cycle billing and interest charges forbalances paid during grace period (February 22, 2010)Copyright © 2010 Alston+Bird LLP. Proprietary and Confidential. All rights reserved.6ALSTON+BIRD LLP

Credit CARD Act – Consumer Protections(Continued)• Prohibits fee-based overdraft protection unlessconsumer opts in (February 22, 2010)Only 1 such fee per billing cycle and then only for atotal of three consecutive billing cycles if sameoverdraft continues• Prohibits issuers from charging separate fee to allow aconsumer to repay an extension of credit or financecharge except in case of expedited payment serviceusing live customer service representative (February 22,2010)Copyright © 2010 Alston+Bird LLP. Proprietary and Confidential. All rights reserved.7ALSTON+BIRD LLP

Credit CARD Act – Consumer Protections(Continued)• Issuers must consider cardholder ability to makeminimum payments when issuing credit cards(February 22, 2010)Must consider both assets/income and monthlyliabilities• Requires that payments in excess of minimum beallocated to highest APR balance first(February 22, 2010)Copyright © 2010 Alston+Bird LLP. Proprietary and Confidential. All rights reserved.8ALSTON+BIRD LLP

Credit CARD Act – Consumer Protections(Continued)• Payment due date must be the same each month (evenif falls on non-banking day) (February 22, 2010)Payments received on due date by 5:00 pm must beconsidered timelyPayments received on first banking day after due datemust be consider timely if issuer could not acceptsuch payment on the due date• Subprime Cards – If fees for credit access (other thanlate, OTL, or NSF fees) during first year exceed 25% ofavailable credit, none of such fees may be charged tothe account (February 22, 2010)Copyright © 2010 Alston+Bird LLP. Proprietary and Confidential. All rights reserved.9ALSTON+BIRD LLP

Credit CARD Act – Consumer Protections(Continued)• Requires that penalty fees be “reasonable and proportional” to violation(August 22, 2010)Issuers may determine fee for a particular violation based on areasonable proportion of the costs incurred by the issuer as a result ofthat type of feeIssuers may determine fee based on desired deterrent effect – but feemust be no more than is “reasonably necessary” to deter the type ofviolation, as determined by empirically derived, statistically sound model• Requires Issuers to identify factors contributing to APR increases and toreduce APR to pre-increase levels if those factors no longer warrant theincrease(August 22, 2010)Account review required every 6 monthsLook-back includes all APR increases since January 1, 2009Copyright © 2010 Alston+Bird LLP. Proprietary and Confidential. All rights reserved.10ALSTON+BIRD LLP

Credit CARD Act – Enhanced Consumer Disclosures• Repayment disclosures table (February 22, 2010)Warning that making only minimum payments will result in more interestpayments and longer balance payoffPayoff timing disclosures:• Number of months required to pay off entire balance if onlyminimum payments are made with no further borrowings• Total cost (principal and interest) if only required minimumpayments are made with no further borrowings• Monthly payment amount required to eliminate theoutstanding balance in 36 months and total cost (principaland interest)• Toll-free number for consumers to receive credit counselingservicesCopyright © 2010 Alston+Bird LLP. Proprietary and Confidential. All rights reserved.11ALSTON+BIRD LLP

Credit CARD Act – Enhanced Consumer Disclosures• Late payment deadline and related penalty disclosures(February 22, 2010)• Internet posting of cardholder agreements(February 22, 2010)Copyright © 2010 Alston+Bird LLP. Proprietary and Confidential. All rights reserved.12ALSTON+BIRD LLP

Credit CARD Act – Protection of Young Consumers(February 22, 2010)• Prohibits issuance of credit card to consumer under age 21 unlessapplication includes either an adult co-signer or demonstrates anindependent ability to repay• Colleges/universities must disclose credit card marketing arrangementsand card issuers may not give tangible goods to induce applicationsat/near campus or college/university-sponsored events• Colleges/universities must disclose credit card marketing arrangements• Issuers are prohibited from providing tangible goods to induceapplications at/near campus or college/university-sponsored events• Issuers must report annually to the Federal Reserve Board on the termsand conditions of any marketing or affinity card agreements betweenthe issuer and any institution of higher educationCopyright © 2010 Alston+Bird LLP. Proprietary and Confidential. All rights reserved.13ALSTON+BIRD LLP

Credit CARD Act – Gift Cards (August 22, 2010)• Applies generally to open-loop and closed loopprepaid/gift cards, with certain exceptions• Prohibits dormancy/inactivity/service fees except wherecard has been inactive for at least 12 months• Prohibits expiration dates of less than 5 years after laterof issuance or last load• No preemption of more restrictive state lawsCopyright © 2010 Alston+Bird LLP. Proprietary and Confidential. All rights reserved.14ALSTON+BIRD LLP

About the Credit Card Terms Tracking Study• This study tracks and documents credit card pricing and terms across the portfolios of thelargest card issuers in the U.S.• The analysis focuses particularly on recent or forthcoming changes to credit card termsimpacting APRs, fees, grace periods, and allocation of payments.• The changes in terms details provided in this report are collected through a nationwideLightspeed survey of approximately 10,000 credit card holders each month.• The terms documentation is based on copies of actual change in terms notificationsmailed by issuers to U.S. consumers.• Supplemental data on major issuers' pricing and grace periods are drawn fromLightspeed's behavioral tracking panel, a nationally-representative sample of cardholdersfrom whom we electronically capture credit card and debit card statement details on anongoing basis.• All information about terms and changes in this report is based on best-available datafrom our database of terms and changes in terms notifications. The terms changenotifications received from cardholders and reported here may not reflect all changesannounced by issuers or all products within an issuers' portfolio.Copyright © 2010 Lightspeed Research. Proprietary and Confidential. All rights reserved. 15

Implementation of Credit Card Legislation• February 22 marked the long-anticipated deadline for compliance with severalremaining key provisions of the 2009 CARD Act.― Phase 1 – Implemented on August 20, 2009:• Cardholders must be provided 45-days notice of significant changes in terms• Minimum of 21 days between statement delivery and payment due date― Phase 2 – Implemented on February 22, 2010:• Issuers are to disclose the period of time and total interest that will be paid if a consumerrepays a card balance by making only the minimum monthly payment• Limits on the re-pricing of existing balances, except in the case of a payment more than60-days past the due date or promo rate expiration• Penalty rates to be re-examined six months after they are applied• Payments in excess of the minimum must be applied to highest interest rate balances first,except for deferred interest balances• Prohibits issuers from setting early morning deadlines for credit card payments; paymentsreceived on weekends or holidays will not be penalized and credit the next business day• Over-limit fees cannot be charged unless cardholder has agreed to allow the issuer tocomplete over-limit transactions• Limits APR, fee or finance charge increases within the first year of account opening• Universal default and two-cycle billing will no longer be permissible• Promotional rates must last for at least 6 monthsCopyright © 2010 Lightspeed Research. Proprietary and Confidential. All rights reserved.16

Recent Highlights• In the weeks leading up to February‟s deadline for compliance with the CARD Act, severalissuers mailed new notifications or, in some cases, fully-updated Terms and Conditionsdocumentation to cardholders.• Issuers also started to roll out the required new statement format (examples to follow).• Issuers continue to take varying approaches with regard to grace periods, new card offers,card fees, APRs, overlimit opt-in, and more.• Even communication strategies differ from one issuer to the next.― Some issuers, such as Capital One and Chase, note that the changes are due to newlaws and regulations impacting the industry.― Others, such as Wells Fargo and US Bank, state that they are making changes tohelp them manage their accounts.For Example: “[We are making] beneficial changes that should help youbetter manage your money, and depending on how you use your account,may have a positive financial impact on your account.”Copyright © 2010 Lightspeed Research. Proprietary and Confidential. All rights reserved. 17

All major issuers have been sending out multiple Terms Changes.AmericanExpressBank ofAmericaCapital One Chase Citi Discover HSBC US Bank Wells FargoSeptember2009•Pricing•PenaltyFees• Pricing• Rewardsprogram• RewardsProgram• Pricing• Pricing• Annual Fee• Rewardsprogram• Pricing• PaymentTerms• Penalty fees• TransactionFees• PricingOctober2009• RewardsProgram•RewardsProgram• Pricing• RewardsProgram• Pricing• PaymentTerms• Penalty fees• TransactionFees• RewardsProgram• Pricing• PaymentTerms• PenaltyFees• Transactionfees• Pricing• PenaltyFeesNovember2009•Pricing•PaymentTerms•PenaltyFees•RewardsProgram• Annual Fee• PaymentTerms• Pricing• Pricing• PaymentTerms• TransactionFees• Penalty fees• Pricing• Transactionfees• Annual Fee• Pricing• PaymentTerms• PenaltyFees• Transactionfees• Annual Fee•Pricing• Pricing• PenaltyFeesDecember2009•Pricing•PaymentTerms•PenaltyFees•RewardsProgram• RewardsProgram• Pricing• Rewardsprogram• Pricing• Transactionfee• Pricing• Pricing• PenaltyFeesJanuary2010• Pricing• Annual fees• Paymentterms• PenaltyFees• Pricing• PenaltyFees• Pricing• PaymentTerms• PenaltyFees• TransactionFees• Pricing• PenaltyFees• TransactionFees• Pricing• Pricing• PaymentTermsFebruary2010•Pricing• Pricing• PaymentTerms• PenaltyFees• Pricing• PaymentTerms• PenaltyFees• Pricing• Annual Fees• PaymentTerms• PenaltyFees• Pricing• PaymentTerms** Months shown reflect month Lightspeed collected and reported receipt of changes in terms sent by issuers.Copyright © 2010 Lightspeed Research. Proprietary and Confidential. All rights reserved. 18

Cardholders Receiving Changes in Terms• Over the past several months, cardholders have been receiving a steady stream of creditcard change-in-terms notifications.Trended Receipt of Changes in Terms Notification*Among Respondents with One or More Cards from Each IssuerIssuerJuly2009August2009September2009October2009November2009December2009January2010February2010American Express 17% 16% 20% 13% 11% 14% 11% 10%Bank of America 41% 15% 17% 15% 15% 15% 21% 20%Capital One 34% 14% 15% 15% 15% 14% 16% 20%Chase 38% 19% 19% 19% 20% 21% 19% 23%Citi 27% 14% 16% 14% 16% 21% 18% 17%Discover 22% 8% 11% 17% 16% 12% 11% 12%HSBC 24% 9% 13% 22% 22% 18% 27% 24%US Bank 20% 10% 11% 10% 12% 11% 11% 14%*What type of credit card did you receive a Change In Terms Notification for?Copyright © 2010 Lightspeed Research. Proprietary and Confidential. All rights reserved. 19

Consumer Awareness of Terms Changes• Many cardholders who actually receive an APR or credit line change on their accountare not aware of this change – although awareness of negative changes is much higherthan awareness of positive changes.Percent Aware of a Terms ChangeBase: Consumers Who Had a Terms Change on AccountSummer 200961%42%43%5%APR Increase APR Decrease Credit Line Increase Credit Line Decrease*Cardholders were asked, “Which of the following has happened to one of your credit cards in the past 3months?” Awareness is measured by the percent who had a change and answered the question in the affirmative.Copyright © 2010 Lightspeed Research. Proprietary and Confidential. All rights reserved.20

Comparison of Balance Transfer (and Cash Adv) OffersBalanceTransfer / CashAdvance Fees Minimum Maximum Notes2%-4% $2 - $10$150n/a• Most offers feature a 3% or 4% fee with aminimum of $10.• Maximums are rarely listed.2%-4% n/a n/a • Capital One fees range from 2% to 4%.3%-4% $5$349n/a• Most Chase offers collected had a 3% fee witha minimum of $5.• Maximums are rarely listed.3-5% $5 n/a3%-5% $10 n/a• Most Citi offers collected had a 3% fee with aminimum of $5.• Most balance transfer fees are 5%.• Some newer offers with cash advance fees of3%/minimum $5 include a statement indicatingthe new standard cash advance transaction feewill be 5% with a minimum of $10 starting inJanuary 2010.Note: Existing accounts only – does not include new card offers.Copyright © 2010 Lightspeed Research. Proprietary and Confidential. All rights reserved. 23

Issuer Actions on Credit Card Overlimit FeesIssuerOverlimit Limit Fees ActionAmerican ExpressAmerican Express has notified cardholders that they are eliminating the overlimit fee.Bank of AmericaCapital OneChaseCitiDiscoverUS BankWells FargoBank of America has notified cardholders that they are eliminating the overlimit fee.Capital One has notified cardholders that they may opt-in to allow overlimit charges on someaccounts. The Capital One fee of $29 will apply only once per billing cycle, even for multipleinstances of over-limit.Chase has allowed some cardholders to opt-in to over-limit fees – but the opt-in seems tovary by cardholder: some accounts have not had the overlimit opt-in clause while others do,regardless of product type.Citi mailed change in terms notices that included $39 overlimit fees, effective January 2010,barely a month before the February restrictions took effect. Citi has since eliminated theoverlimit fee.Discover has notified cardholders that they are eliminating the over-limit fee.US Bank has notified cardholders that they may opt-in to allow overlimit charges; a $39 feeapplies when exceeding the credit limit.Wells Fargo has notified cardholders that they are eliminating the over-limit fee.Copyright © 2010 Lightspeed Research. Proprietary and Confidential. All rights reserved.24

Specific Examples: Bank of America Changes in TermsBofA Changes Effective February 2010• Bank of America informed its customers how they “may be affected by the CARD Act…intended to make it easier to manage [their] account.”• These changes have been made across many different products, including WorldPoints,Visa Signature, Platinum Plus and the Bank of America Card.1. Limits on re-pricing:―APRs on existing balances can only be raised in cases of a 60-day delinquency―Eliminating default rates triggered by late payments2. Eliminating Over-Limit Fees3. Payments in excess of the total minimum payment due will be applied to balanceswith higher APRs before balances with lower APRs.4. Payment Cutoff Dates―Payment cutoff times for mailed payments will change from 5pm Eastern Time to5pm local time at the address shown on the remittance slip attached to statement.Eliminating Over-limit Fees.Copyright © 2010 Lightspeed Research. Proprietary and Confidential. All rights reserved.25

Specific Examples: Citi Annual FeesEffective April 2010• Citi continues to assess annual fees on selected Citi Card and Diamond Preferredaccounts due to the “rising cost of doing business”:― Annual fee of $60 being added― Annual fee will be waived and credited back each year if that year‟s totalpurchases, less any returns, is greater or equal to $2,400 (each year begins April1 st and ends March 31 st )Example: Citi Card and Citi Diamond Preferred Card Annual FeeCopyright © 2010 Lightspeed Research. Proprietary and Confidential. All rights reserved. 26

Specific Examples: Chase Changes in APRs• Chase has sent several notices focused on re-pricing purchase, balance, cashadvance and overdraft advance APRs for many different card products.• These changes have been made “in response to market conditions, new federal lawsand regulations, and increasing costs.”― Purchase and Balance Transfer APRs:• Chase Card: Prime + 10.99, Prime + 17.99, Prime + 18.99, Prime + 21.99, Prime +23.99, Prime + 24.99, Prime + 25.99• Chase Visa, MasterCard: Prime + 24.99, Prime + 25.99• Chase Free Cash Rewards: Prime + 4.74― Cash Advance APRs:• Chase Card: Prime + 19.99, Prime + 24.99, Prime + 25.99• Chase Visa, MasterCard: Prime + 24.99, Prime + 25.99• Chase Free Cash Rewards : Prime + 15.99― Default APR:• Chase Card: Prime + 26.99 (maximum of 29.99)― Overdraft Advance APRs:• Chase Free Cash Rewards : Prime + 15.99• Chase Card: Prime + 15.99, Prime + 17.99, Prime + 18.74, Prime + 22.99, Prime +24.99, Prime + 25.99, Prime + 26.74• Chase Visa, MasterCard: Prime + 22.99, Prime + 24.99, Prime + 25.99Copyright © 2010 Lightspeed Research. Proprietary and Confidential. All rights reserved.27

Specific Examples: American Express Changes in RewardsAmerican Express Reward Changes• American Express informed its Hilton HHonors and Delta SkyMiles cardmembers thateffective January 2010 late payments will result in loss of rewards program points:1. Points lost can be reinstated within the following 24 billing periods once the amountpast due has been paid, with a fee of $29.2. Forfeited Miles will not be reinstated if there is any amount past due on the account.• The annual cap on Delta SkyMiles that can be earned is removed effective Feb 2010.American Express Delta SkyMiles ChangesCopyright © 2010 Lightspeed Research. Proprietary and Confidential. All rights reserved.28

Specific Examples: Citi Special Offers – Interest BackCiti Interest Back Special Offer• Citi has offered an interest back program that can earn certain qualified customers a portionof interest charges back each month provided they make their payments on time.• Mailings collected in late 2009 / early 2010 offered a noticeably high percentage of interestcharges back, ranging from 15% to 65% across different products:― Dividend Platinum Select: 15%― Citi Card: 15%, 30%, 60%― Diamond Preferred Card: 35%― PremierPass Elite: 65%• This program was announced in tandem with pricing and fee changes.Interest Back Program Offer: Citi CardCopyright © 2010 Lightspeed Research. Proprietary and Confidential. All rights reserved.29

Specific Examples: New Easy-to-Understand Statement Format• Another key provision of the CARD Act is requirements concerning the format of credit card statements,calling for important information to be easier for cardholders to understand.• New elements to be included in new enhanced statements include:1. Use of tables to present information in a clearer way, with important dates prominently displayed2. Minimum Payment Warning and Key Payment Information:- A warning explaining how making only minimum payments will increase the amount of timeneeded to pay down debt in full and the total interest that will be paid as a result.- How long it will take to pay the balances off in full if only minimum monthly payments aremade, and the total amount they will pay – including interest – if making minimum payments.- The number of months and the total cost – including interest and principal payments – to paythe entire balance if only the required minimum monthly payments are made, and how muchwould have to be paid each month if they would like to pay off the balance within 36 months.3. Summary of account information to include grouping of fees and interest charges, with year-to-datetotals of fees and interest charges accrued by cardholder annually.4. Updated changes in terms to be presented in monthly statements such as re-pricing information orupcoming expiration of a promotional period.5. Interest charge calculation: A breakdown and description of APRs that apply to the account,including which balances are subject to what APR.6. Summary of rewards information, if applicable.Several issuers were already rolling out these changes in February.Copyright © 2010 Lightspeed Research. Proprietary and Confidential. All rights reserved. 30

Specific Examples: New Easy-to-Understand Statement FormatFigure 1: Old Chase StatementFigure 1a: New Chase Statement26Copyright © 2010 Lightspeed Research. Proprietary and Confidential. All rights reserved. 31

Specific Examples: New Easy-to-Understand Statement FormatFigure 1a: New Chase Statement(continued from previous page)Figure 1a: New Chase Statement(zoomed-in from previous page)35Copyright © 2010 Lightspeed Research. Proprietary and Confidential. All rights reserved. 32

New Card and Existing Account OffersExisting Account Offers:―Chase has communicated to some of its “preferred” customers that they areextending the duration of their 0% balance transfer offers, or reducing the rate ofsome of their longer-term offers by one-quarter percent.―Capital One has to some extent scaled back on its 0% balance transfer offers and isnow offering a higher number of 3.99% offers.―Bank of America and Chase extend the widest range of balance transfer/cashadvance offers – typically with rates from 0% to 5.99%.New Card Offers:• Despite generally rising APRs, some new card offers still include 0% purchase APRintroductory rates.―All top issuers have some offers at 0% for five to twelve months, though the offersvary substantially by card product.―Bank of America and Chase appear to be the most aggressive, with mostintroductory APRs lasting for 12 months.―Discover appears to be the most conservative with introductory rate durationscapped at five to six months.Copyright © 2010 Lightspeed Research. Proprietary and Confidential. All rights reserved.33

Promotional Rates / Duration Competitive SummaryExisting Account Balance Transfer / Cash Advance Offers0% 6-10 months.99% 5-7 months1.99% 3-7 months2.99% 6-7 months3.99% 7 months5.99% 7 months0% and .99% weremost prominentoffers received inDecember 20090% 5-12 months.99% 5-8 months1.74% 14 months1.99% 13-17 months2.99% 14-17 months3.74% 14 months3.99% 14-23 months4.99% 14-17 months5.99% 23 monthsChase has a wide variety of offers, with most offering achoice of 0% for a shorter duration and a higherpercent for longer durations. The most common inDecember were the choice between 0% and 1.99%.0% 5-8 months.99% 6-8 months1.99% 10-14 months2.99% 11-17 months.99% and 1.99%were mostprominent offersreceived inDecember 20090% 3-4 months5.99% 9 months0% was mostprominent offerreceived inDecember 20090% and 3.99%were mostprominent offersreceived inDecember 20090% 12 months3.99% 12 monthsNote: Does not include new card offers.Note: Based on offers collected December 2009 – January 2010; Lightspeed Research, January 2010 ReportCopyright © 2010 Lightspeed Research. Proprietary and Confidential. All rights reserved.34

Pricing / Duration Competitive Summary: 0% OffersNew Card OffersIntroPurchaseRateDurationGo-To Rate0% 6-12 months 13.24-17.24Additional rewardsincentives may includeadditional points afterfirst purchase withinspecific timeframeIntroPurchaseRateDurationGo-To Rate0% 6-12 months 11.99-15.24Additional rewardsincentives mayinclude variousextra points or cashback after firstpurchaseNo change from previous monthPrevious months had slightly lower go-to ratesIntroPurchaseRateDurationGo-To Rate0% 7-12 months 13.24-21.24Previous months had slightly lower go-to ratesSign-on rewardsincentives may includebonus miles or extra cashbackor points on specificpurchases for 6 monthsIntroPurchaseRateDurationGo-To Rate0% 7-8 months 12.99-18.99Previous months had slightly lower go-to ratesAdditional rewardsincentives mayinclude extra pointsor miles whencertain spendingthresholds havebeen metIntroPurchaseRateDurationGo-To Rate0% 5-12 months 9.99-19.80Additional rewardsincentives may includeextra points/miles uponaccount opening or ifcertain annual spendingthresholds are metIntroPurchaseRateDurationGo-To Rate0% 5-6 months 11.99-17.99Additionalrewardsincentivesmay includecash-backbonusesPrevious months had slightly higher go-to ratesPrevious months had slightly higher go-to ratesNote: Based on offers collected December 2009 – January 2010; Lightspeed Research, January 2010 ReportCopyright © 2010 Lightspeed Research. Proprietary and Confidential. All rights reserved.35

Promotional Rate ExamplesNew Account OffersProduct Product/Rewards Program Intro Purchase APR Intro Rate DurationGo-to PurchaseAPRBluePoints0%0%6 billing cycles12 billing cycles13.24%--Starwood Preferred GuestPointsCash Rewards forBusinessCash-back2.90% 6 billing cycles 15.24%0% 12 billing cycles --Power Rewards VisaPointsNo Hassle Miles UltraMasterCard Professional0% 7 billing cycles0% 9 billing cycles13.24%17.24%21.24%9.99%12.99%Platinum MasterCard 0%6 billing cycles12 billing cycles12 billing cycles19.80%18.90%19.80%Note: Based on offers collected December 2009 – January 2010; Lightspeed Research, January 2010 ReportCopyright © 2010 Lightspeed Research. Proprietary and Confidential. All rights reserved.36

Promotional Rate Examples (Continued)New Account OffersProduct Product/Rewards Program Intro Purchase APR Intro Rate DurationFreedomUltimate Rewards(points and cash-back)0%0%6 billing cycles9 billing cycles12 billing cyclesGo-to PurchaseAPR13.24%13.24%13.24%-15.24%SlateWith Blueprint0% 12 billing cycles11.99%12.99%Diamond Preferred 0% 9 billing cycles 18.99%Platinum SelectMasterCard0%0%0%7 billing cycles7 billing cycles7 billing cycles12.99%15.99%18.99%Discover MoreCash-back0% 5-6 billing cyclesA rate between11.99%-17.99%Note: Based on offers collected December 2009 – January 2010; Lightspeed Research, January 2010 ReportCopyright © 2010 Lightspeed Research. Proprietary and Confidential. All rights reserved.37

Summary of Delinquency Offers*BalanceReductionPayment Plan orReduced APR/ PaymentMatch PaymentAmerican Express None collected to date. None collected to date. None collected to date.ChaseYes. No details in anyoffer.Yes. Payments applied toprincipal.None collected to date.Bank of AmericaNone collected to date.Yes. Offered to late stagedelinquency, must makeminimum payment.Yes. Matched paymentis paid as waivedfinance charges.CitibankYes. Forgive balancesup to 60% of O/SYes. No details in any offer.Yes. Citi will match20% of paymentsDiscoverNone collected to date.Yes. If 3 minimum paymentsare made, account isconsidered reinstated.None collected to date.Capital OneYes. Forgive 40% ofthe balance.Yes. Reduced payment andAPR.None collected to date.*NOTE: This summary is only for explicit offers provided by the issuers. Most issuers include wording in delinquencynotifications implying that they will work with cardholders to find a solution such as modifying payments or reducing theamount owed. Those type of statements are not included in this summary. This summary does not include collectionagency offers.Based on data collected through January 2010.Copyright © 2010 Lightspeed Research. Proprietary and Confidential. All rights reserved.38

Debit Card OverdraftsCredit cards are not the only product being targeted by legislation.• The Federal Reserve has issued a ruling related to Regulation E (which governs ElectronicFund Transfers) that no longer permits banks to automatically assign overdraft protection (andthe related fees) to consumers for ATM and one-time debit transactions.― Once the ruling goes into effect (scheduled for July 1 st ), consumers will have to opt-in tothis overdraft protection rather than have it automatically given to them.• Two of the nation's largest banks -- Bank of America and Chase – have already staked outdistinct positions:― Bank of America announced in March it will stop authorizing point-of-sale debit cardpurchases this summer if the transaction would result in an overdraft.• Bank of America customers will “still have the choice to link their checking account toanother account through Overdraft Protection” in order to cover overdrafttransactions.― Meanwhile, Chase is allowing customers to opt-in to overdraft coverage for debit cardpurchases.• Chase has been mailing on a large scale to customers, alerting them of the changewhich requires them to opt-in by phone, online, or in a branch before Aug. 15, 2010.Chase will continue its current policy of not allowing overdrafts on ATM withdrawals.Copyright © 2010 Lightspeed Research. Proprietary and Confidential. All rights reserved.39

Prepaid Cards• In November, the Fed announced proposed rules that would restrict the fees and expirationdates that may apply to gift cards.― The rules are intended to protect consumers from certain unexpected costs and wouldrequire that gift card terms and conditions be clearly stated.― The proposed rules would prohibit dormancy, inactivity, and service fees on gift cardsunless: (1) there has been at least one year of inactivity on the certificate or card; (2) nomore than one such fee is charged per month; and (3) the consumer is given clear andconspicuous disclosures about the fees.― Expiration dates for funds underlying gift cards must be at least five years after the dateof issuance, or five years after the date when funds were last loaded.― The proposed rules generally cover retail gift cards, which can be used to buy goods orservices at a single merchant or affiliated group of merchants, and network-branded giftcards, which are redeemable at any merchant that accepts the card brand.Copyright © 2010 Lightspeed Research. Proprietary and Confidential. All rights reserved.40

Appendix Slides: Competitive Summary of Recent ChangesCopyright © 2010 Lightspeed Research. Proprietary and Confidential. All rights reserved. 41

Appendix: Competitive Summary -- APR ChangesNew Entries this MonthRecent or Imminent ChangesChanges within Past YearAmericanExpressBank ofAmericaCapital One Chase Citi Discover HSBC US Bank Wells FargoPurchaseAPRMultiple productschanged to Primeplus marginsranging from 6.99to 13.99.(Effective Oct2009)Bank of Americacard APRchanged toi. 23.99 (Prime +20.74)Ii. 19.98 (Prime +16.73)(Effective Aug2009)Capital Onecard:Extendingpromotionalperiod fordeferred APRincrease fromJan 2010 to Jul2010.(Effective Jan2010)Multiple productsAPR changed toPrime plus marginsranging from 4.74 to25.99(Effective Jan 2010)DividendPlatinum SelectAPR changedfrom variableAPR to fixed of23.99(Effective Feb2010)Discover card APRincreased to:i. 15.99 (Prime +12.74)ii. 16.24 (Prime +12.99)(Effective Nov2009)Multiple cards:1. APRchanged toPrime plusmarginsranging from6.24 to 24.742. Previouslydisclosedminimum andmax APRs nolonger applies(Effective Dec2009)Multiple productsAPR changed tomargins rangingfrom 6.74 to15.74.(Effective Dec2009Home ProjectsVisa APRchanged to Prime+ 22.74 (minimumof 25.99)(Effective May2010)DefaultAPRMultiple productsAPR changed to27.24 (Prime +23.99).(Effective Jan2010)Multiple products:Eliminating DefaultAPRs due to latepayments.(Effective Feb2010)Multipleproducts:Penalty APRcan only beapplied toexistingbalances if 60daysdelinquent.(Effective Feb2010)1. AARP Rewardsand Chase cardAPR changed tomaximum of 29.99(Prime + 26.99).(Effective Jan 2010)2. Penalty APR canonly be applied toexisting balances if60 days delinquent.(Effective Feb2010)Multiple cardschanged to 29.991. (Prime + up to26.74)2. Prime + up to23.99 (minimumof 29.99).(Effective Jan2010)Discover card APRchanged to: Up to5 points plusotherwiseapplicablepurchase APR.(Effective Jan2010)Multiple cardsAPR changedto Prime plusmarginsranging from23.74 to 27.74.(Effective Dec2009)Multiple cardsAPR changed tominimum of28.99.(Effective Mar2009)Home ProjectsVisa:Removing DefaultRate.(Effective Feb2010)CashAdvanceAPRMultiple productsAPR changed to25.24 (Prime +21.99).(Effective Jan2010)Multiple cardsAPR changed toPrime plusmargins rangingfrom 16.74 to21.74(Effective Aug2009)Multiple cardschanged to 24.9(Prime + 21.65).(Effective Jul2009)Multiple productsAPR changed toPrime plus marginsranging from 15.99to 25.99.(Effective Jan 2010)CashReturnsAPR changedfrom variableAPR to fixed of19.99(Effective Feb2010)Discover card APRchanged to 23.99(Prime rate +20.74).(Effective Dec2009)Multiple cardsAPR changedto Prime plusmarginsranging from21.65 to 25.74.(Effective Dec2009)US Bank card andSelect Rewardscard APRchanged to Prime+ 20.74 (minimumof 23.99).(Effective Dec2009)1. Wells Fargocredit cardchanged to Prime+ 18.24 (minimumof 23.99)2. Wells FargoFinancial cardminimum APRincreased.(Effective Nov2009)OverdraftAdvanceAPRNo changecollectedNo changecollectedNo changecollectedMultiple productsAPR changed toPrime plus marginsranging from 15.99to 25.99.**(Effective Jan 2010)No changecollectedNo changecollectedNo changecollectedNo changecollectedNo changecollected** Any changes to the WaMu card are now included under the Chase column.Source: Lightspeed Research Terms Tracking Study, February 2010Copyright © 2010 Lightspeed Research. Proprietary and Confidential. All rights reserved. 42

Appendix: Competitive Summary -- Payment TermsNew Entries this MonthRecent or Imminent ChangesChanges within Past YearAmericanExpressBank ofAmericaCapital One Chase Citi Discover HSBC US Bank Wells FargoMinimumPaymentFor TrueEarningsCostco card:Removed 1/24 th ofover-limit amountfrom minimumpayment charge, ifnew balanceexceeds credit limit.(Effective May 2009)Bank of AmericaCard changed to:Sum of 1% ofnew balance +new financecharges + anynew late fee.Minimum of $15.(Effective Jan2010)No recent changecollectedChase cardchanged to thegreater of:1. $102. 2% of the newbalance OR3. Sum of 1% ofnew balance,billed interest andany late fees.(Effective Feb2010)Sears cardchanged to:Sum of (amtexceeding creditline + amt pastdue) + greater of(new balance if10OR 1% of newbalance + financecharges + late feeOR 1.5% of acctbalance)(Effective Sep2009)Changed to sumof:1. The greater of$40 OR 2% + newbalance (plus $40if new balanceincludes a BTbalance) OR(current financecharges + latefees + $20)2. Any amountpast due.(Effective Dec2009)HSBC UnionPlus card offersSkip PaymentOptions toqualifiedmembers.(Effective Aug2009)No changecollectedHome Projects Visachanged to:If new balance < $25,minimum pay = newbalance. Otherwiseany amounts past dueplus the greater of1. $25 OR2. 3.5% of the highestnew balance OR3. Sum of interestcharges plus feesassessed plus 1% ofhighest new balance(Effective Feb 2010)FinanceChargesFor multipleproducts: Minimumfinance charge of$0.50 removed.(Effective Jan 2010)Upromise card:Minimum of$1.00.(Effective Mar2009)No changecollectedMultiple cardsminimum financecharge changedto $1.00.**(Effective Jan2010)Shell cardminimum financecharge changedto $2.00(Effective Jan2010)Charges will beimposed fromtransaction dateand no longer thepost date - unlesstransaction wasposted after closeof billing cycle.(Effective May2009)HSBC Platinumcard: Minimumof $1.00(Effective May2009)No changecollectedNo recent changecollectedGracePeriodNo change collectedMultiple products:At least 25 daysfrom statementclosing date.(Effective Feb2010)No changecollectedMultipleproducts: Atleast 21 days.**(Effective Feb2010)At least 20 daysfor the Searscard.(Effective Sep2009)Grace periodremains as 25days, but paymentdue date will bechanged.(Effective May2009)Best BuyRewards card:23 days.(Effective Jul2009)No changecollectedNo recent changecollectedPaymentAllocationFor multipleproducts: Paymentsup to the minimumdue will be applied tolower interest ratebalances first, andpayments above theminimum due will beapplied first to higherinterest ratebalances and then tolower interest ratebalances.(Effective Feb 2010)Multiple products:Payments inexcess of the totalminimum paymentdue will be appliedto balances withhigher APRsbefore balanceswith lower APRs.(Effective Feb2010)We applyminimumpayment tolower APRbalances beforehigher ones, andany portion ofpayment inexcess of theminimumpayment tohigher APRbalances beforelower ones.(Effective Feb2010)Multipleproducts:Payments abovethe minimumpayment due willbe applied firstto higher interestrate balancesand then tolower interestrate balances.**(Effective Feb2010)Sears Card: “Youauthorize us toapply paymentsthat are mostfavorable orconvenient to us.This may includeapplyingpayments andcredits to low APRbalances first”.(Effective Sep2009)Payments inexcess ofminimum paymentdue will be appliedto higher APRsfirst.(Effective Feb2010)Any amountpaid in excessof the monthlyminimumpayment will beallocated first tobalances withthe highestinterest rate.(Effective date:TBA)Amountgreaterthan theminimumpay will beapplied tothe highestto lowerAPRbalances.(EffectiveFeb 2010)Wells Fargo Card:Any amount paid inexcess of themonthly minimumpayment will beapplied first tobalances with thehigher APRs beforebalances with lowerAPRs.(Effective Feb 2010)** Any changes to the WaMu card are now included under the Chase column.Source: Lightspeed Research Terms Tracking Study, February 2010Copyright © 2010 Lightspeed Research. Proprietary and Confidential. All rights reserved. 43

Appendix: Competitive Summary – Penalty FeesNew Entries this MonthRecent or Imminent ChangesChanges within Past YearAmericanExpressBank ofAmericaCapital One Chase Citi Discover HSBC US Bank Wells FargoLate FeeMultiple cards:Based on balances< $250 = $19,> $250 = $39.(Effective Oct2009)NEA Card:Changed to$35(Effective Jun2009)Late payment feebased onbalances whenfee is applied:$0 - $99=$15$100-$249.99=$29> $250=$39.(Effective Jan2009)Based on balances:1. AARP Rewards:$750 = $392. Chase card:$0 -

Appendix: Competitive Summary -- Transaction FeesNew Entries this MonthRecent or Imminent ChangesChanges within Past YearAmericanExpressBank ofAmericaCapital One Chase Citi Discover HSBC US Bank Wells FargoOD ProtectionFeeNo changecollectedUpromise card: 3%of overdraftamount, minimumof $10. OverdraftCash Advance isgiven in incrementsof $100.(Effective Mar2009)No changecollectedNo changecollectedNo changecollectedNo changecollectedNo changecollectedNo changecollectedNo recent changecollectedCashAdvance FeeNo changecollectedMultiple cards:4% of cashadvance amount,minimum of $10.(Effective Jun2009)Greater of 3%of cashadvanceamount OR$10.(Effective Jan2009)Multiple cardschanged to 5% oftransaction, witha minimum of$10.(Effective Jan2010)Multiple cardschanged to:1. 5% of balancetransfer amount,minimum of $10.2. 5% of balancetransfer amount,minimum of $5.(Effective Jan2010)Increased tomaximum of 5%or minimum of$10.(Effective Jan2010)Maximum feespreviouslydisclosed formultiple productsno longer apply.(Effective Dec2009)No changecollected4% of amountwith minimum of$5. Increasedmaximum to $99from the current$75.(Effective Apr2009)InternationalTransactionFeeFor multipleproducts:Foreigncurrencyconversions willbe itemized as afinance charge.(Effective Jul2010)1. Multiple cards:3% of amount2. Platinum PlusVisa: 2% ofamount.(including onlinepurchases in US$from foreignmerchants).(Effective Jun2009)No changecollectedNo changecollectedExxon-Mobil andthe CITGO cardchanged to:3% of US$ amountof foreignpurchases.(Effective Jan2010)2% of US$amount.(Effective May2009)3% of USDamount. Foreignfee on purchaseswill be added topurchase balance,and foreign fee oncash advanceswill be added tocash balance.(Effective May2009)3% of US$amount. Ifprocessed byVisa/MasterCard, foreignfee is 2% ofUS$ amount.(Effective Mar2009)No changecollectedBalanceTransfer FeeNo changecollectedMultiple cards:4% of amount,minimum of $10.(Effective Jun2009)No changecollectedMultiple cardschanged to 5% oftransaction, witha minimum of$10.(Effective Jan2010)Multiple cardschanged to:1. 5% of balancetransfer amount,minimum of $10.2. 5% of balancetransfer amount,minimum of $5.(Effective Jan2010)Increased tomaximum of 5%or minimum of$10.(Effective Jan2010)Maximum feespreviouslydisclosed formultiple productsno longer apply.(Effective Dec2009)No changecollected3% of balancetransfer amount,but not less than$5 or more than$99 for any singlebalance transfer.(Effective Apr2009)** Any changes to the WaMu card are now included under the Chase column.Source: Lightspeed Research Terms Tracking Study, February 2010Copyright © 2010 Lightspeed Research. Proprietary and Confidential. All rights reserved. 45

Contact InformationDuncan B. DouglassPartnerAlston & Bird LLP404-881-7768Duncan.Douglass@alston.comJoel StantonSenior AnalystLightspeed Research617-431-5361jstanton@lightspeedresearch.comLightspeed Research’s Financial Services Group:http://www.lightspeedresearch.com/products/financial-servicesALSTON+BIRD LLPCopyright © 2010 Lightspeed Research. Proprietary and Confidential. All rights reserved.