Chapter 5: Ethics Audit of the Credit Card Act Impacting Issuer Reputation and Sustainability: Policy Leaks, Concerns and Amendment Recommendations

The authors create an ethics audit framework and conduct an ethics audit on the planning, implementation and marketplace effects of Title III of the 2009 Credit Card Accountability and Reporting Disclosure (CARD) Act and identify implications for firm reputation and sustainability. The ethics audit reveals ethical breaches stemming from violations of stakeholder theory, social justice, consumer sovereignty, duty of non-malfeasance and consumer (college student) quality of life. Policy leaks threaten consumer well-being and fuel a watershed of predatory practices in each area addressed by the Act: extending credit, increasing credit lines to existing accounts, reporting requirements for bank issuers of credit cards and the Board of Governors of the Federal Reserve System, limiting issuer pre-screened credit offers, protecting privacy (disclosure requirements for institutions of higher learning) and limitations to bank issuer inducements on campus. Recommendations for firms, policymakers and future research are provided.