Signet Banking Corporation - Page 7

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          provided to cardholders.  William F. Binns, petitioner's vice               
          president in charge of credit card services, answered telephone             
          and written inquiries objecting to the new fee.  He told                    
          cardholders that the card was a good value for $1.25 a month.               
               Petitioner projected that, as a result of imposing the                 
          annual membership fee, it would lose 25 percent of its MasterCard           
          accounts, including most in the inactive group and many of the              
          convenience users.  Although many closed their accounts, the                
          number who did so was less than petitioner had projected.                   
               From 1983 to 1985, petitioner imposed the annual membership            
          fee at the start of each cardholder’s membership year.                      
          Petitioner billed the fee on the first statement for that year.             
               From 1983 to 1985, petitioner typically charged cardholders            
          who incurred interest charges on their balances an 18-percent               
          annual percentage rate.  Petitioner charged its Gold MasterCard             
          customers a lower rate and charged some of its non-Virginia                 
          customers up to 21 percent.  Petitioner considered its Gold                 
          MasterCard customers to be lower risks even though they typically           
          carried higher monthly balances.                                            
               From 1983 to 1985, petitioner occasionally waived the first            
          year’s membership fee if the customer was a member of an affinity           
          group, waived the annual fee for the year in response to some               
          customer complaints, and waived the annual fee for some active              
          customers who threatened to leave.  Otherwise, petitioner                   





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Last modified: May 25, 2011