The head of Discover Card warned employees that credit card reforms backed by Congress could hurt some of their company's best customers. Speaking to a gathering of employees and reporters at the company's Salt Lake City facility, CEO David Nelms admitted that "the ultra-low rates of the past 10 years aren't going to be available anymore." Nelms told his team that the company's shift from "risk-based" pricing to more transparent rate structures would refocus Discover as a customer service-oriented credit card issuer.
Credit card industry analysts have watched Discover evolve from a "closed loop" credit card issuer, controlling all of its own accounts, into more of a payment plaform provider over the past few years. Diversifying into offering certificates of deposit and student loans has helped DFS weather the recession, but analysts still want to see the company grow beyond its current 6% market share of domestic credit card accounts. At the Salt Lake event, Nelms reminded employees that Discover would continue to try new ideas to grow its business, despite a lagging economy.