It is not an understatement to say that the CARD Act has turned the credit card industry on its ear. But, credit unions, by maintaining their focus on offering the best card product available to members, can still be true to who they have always been. And in the light of the day, the CARD Act gives us the chance to shine.

While some of what was enacted proved to be more of an operational headache than meaningful change, the new pricing regulations will have the most significant, longest lasting impact on the credit card industry. These changes immediately required deliberate policy decisions surrounding the management of the credit card portfolio because the CARD Act changed the fundamental structure of pricing. Now issuers are compelled to reprice low-risk cardmembers but are prohibited from repricing those that are high risk. The inevitable result has been an increased cost of card-related credit to all consumers, because issuers now must price everyone who today appears to be of similar risk higher to account for those cardholders who may be charged off in the future.

When you add to the conversation the dilemma of fixed-versus variable-rate credit cards, the pricing model becomes more than a marketing strategy-it's the entire game. While many credit unions made their decision before February, there are still those who are undecided about what is the best vehicle for them. As long as the prime rate stays at its current historic lows, fixed-rate cards are a great offering, but what happens when prime starts to adjust upwards? Do you let a previously important income-producing asset become a loss leader? Because issuers no longer have the ability to reprice existing balances, and go-forward rate changes have a significant notification period, issuers will experience margin compression as yield remains constant and the cost of funds increases. In our analysis, it could take as long as five years to see the full impact of an increase in rates due to the new rules around how cardmember payments are applied to the account.