
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: MONDAY, March 23, 1992                   TAG: 9203230121
SECTION: VIRGINIA                    PAGE: A3   EDITION: METRO 
SOURCE: Associated Press
DATELINE: RICHMOND                                LENGTH: Medium

SIGNET MAY DEAL ITS CARDS ELSEWHERE

The recent veto of credit card legislation has prompted at least one banking corporation to immediately start looking outside the state to set up a new credit card base.

Virginia law requires credit card issuers to maintain a 25-day interest-free grace period. It also puts a cap on the penalty that can be charged for late payments.

A bill that recently sailed through the General Assembly would have lifted those restrictions, but it was halted by Gov. Douglas Wilder.

"What it means, to me, is that I have to start, tomorrow, taking a look at a Delaware presence," said William F. Binns, executive vice president in charge of credit card operations for Richmond-based Signet Banking Corp.

Some banks have placed credit card businesses in Delaware because that state puts fewer restrictions on issuers.

Virginia bank officials maintained they were not looking to eliminate the grace period for customers who prefer that type of card, but needed to gain flexibility they say is needed for building business in a very competitive market.

Signet, the largest Virginia-based card issuer and the oldest card issuer in the country, often finds itself with its hands tied because of the state's regulations, Binns said. About 70 percent of its credit card customers are outside Virginia, meaning that the bank constantly is competing against banks that have more room for creativity, he said.

"I have got to believe that there is some misunderstanding or miscommunication" that led to the outcry against the credit card bill in Virginia.

Binns said banks would be more likely to develop a low-interest, no-grace-period card to offer in addition to existing cards with a grace period.

But consumer groups balked at the idea of allowing banks to scrap the grace period and increase penalty fees. Wilder sided with them, despite lobbyists' arguments that the bill's failure could lead to the loss of Virginia jobs.

It would take a legislative override - two-thirds of the members of the 100-seat House and 40-seat Senate - to resurrect the bill, and some bankers still are hopeful that will happen.

by CNB