To: All Member Banks and Others Concerned in the Third Federal Reserve District

Attention: Compliance Officer



Under the auspices of the Federal Financial Institutions Examination Council, the OCC, FDIC, OTS, and Federal Reserve Board have developed account-management and loss-allowance guidance for credit card lending. The draft guidance would apply to all institutions under the agencies' supervision that offer credit card programs. It describes the agencies' expectations for prudent risk-management practices for credit card activities, particularly with regard to credit-line management, over-limit accounts, and workouts. The draft guidance also addresses income-recognition and loss-allowance practices for credit card lending.

As the agencies complete their review of the draft document, they are interested in the view of affected institutions and other interested parties as to whether the draft provides clear guidance concerning the agencies' expectations in the areas of credit card account management, risk management, and loss allowance practices or, instead, has "fatal flaws" in these areas.

Comment Requested: Comments must be provided no later than 5:00 p.m. on September 23, 2002 and should be submitted electronically to the FFIEC web site, (click on the option

Additional Information: A copy of the draft guidance is attached (18 KB, 5 pages). For additional information, contact David Skidmore at the Federal Reserve Board at (202) 452-2955.