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from amounts paid to merchants (merchant discount), interchange
fees, annual membership fees, finance charges paid by
cardholders, cash advance fees (until May 1983), over limit fees,
and other charges (such as late payment and credit life fees).
Other major banks were charging annual membership fees for
credit cards when petitioner decided to charge an annual fee.
Petitioner was one of the first Virginia banks to do so.
b. Annual Membership Fees Charged by Petitioner
To become or remain a MasterCard cardholder after April 1,
1981, petitioner required payment of an annual membership fee of
$15 for a regular MasterCard or $36 for a Special Edition Gold
MasterCard or a commercial account. On April 1, 1981, petitioner
began to charge its regular MasterCard cardholders an annual
membership fee of $15 regardless of the cardholder’s credit line,
usage, balance (if any) carried from month-to-month, or credit
standing. Petitioner first billed cardholders for the annual
membership fee in July 1981. In 1986, petitioner raised the $15
annual membership fee to $18 per year. From 1983 to 1985,
petitioner also offered affinity group (i.e., alumni of a
particular university) MasterCards for $18 and $20.
c. Implementation of the Annual Membership Fee
Petitioner sent its cardholders a disclosure statement as
required by Regulation Z, 12 C.F.R. sec. 226.9(b) (1981), stating
the change in contract terms and a letter describing the services
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