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Credit card issuers this year are spending tens of millions of dollars to reconfigure their information technology and other systems to comply with the Credit Card Accountability, Responsibility and Accountability Act passed last May. Many also are racing to meet the act's first compliance deadline this month. Beginning Aug. 20, card issuers must have systems in place to notify cardholders at least 45 days in advance of any changes in account terms. The majority of the CARD Act's provisions go into effect next February, when issuers must ensure that their back-office systems support a variety of new parameters, including earlier statement-mailing deadlines and greater disclosure of account-payoff details and consumer opt-in choices for over-limit fees. Issuers also are more restricted concerning when they can raise cardholders' interest rates. "This process is a scramble for a lot of issuers, and while many will easily meet the first deadline, next year's deadlines pose much tougher challenges," Brian Shniderman, director with Deloitte Consulting LLP, tells CardLine sister publication Cards&Payments. "Issuers are weighing tough choices on how to set new policies and fees to be in accordance with the rules, while positioning themselves for future flexibility and profitability." Indeed, the logistics and challenges issuers face in coping with the new regulations are "breathtaking," Richard Fairbank, chairman and CEO of Capital One Financial Corp., told analysts in July during the issuer's second-quarter earnings conference call. Cap One will invest "tens of millions" of dollars and at least 200,000 hours of IT work in its compliance effort, Fairbank said. Besides changing card-statement designs and making numerous back-office changes to accommodate new account terms-notification and statement-mailing deadlines, compliance generally requires "massive changes in communications with customers," he said.

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