New Rule Could Boost Credit Card Charge-Offs

Law360, New York (February 28, 2006, 12:00 AM EST) -- A new rule requiring consumers to make higher minimum payments on their credit cards could boost the charge-off rate reported by card issuers, JPMorgan Chase & Co.’s chief executive warned on Tuesday.

At a presentation to investors, Rich Srednicki said the rule will bring about higher bank charge-offs, which will amount to a couple hundred million dollars by late 2006, as well as supplemental costs in early 2007.

Because of the new regulation, JPMorgan foresees a looming $300 million in costs in its second half of...
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