After defending his bank's unusual credit card fee structure from criticism in Consumer Reports, Premier Bankcard CEO Miles Beacom must now find a way to please the Federal Reserve. Regulators at the Fed proposed changes to banking rules that would more strongly enforce restrictions on the size of service fees charged for access to subprime credit cards.

The Fed previously implemented rules mandated by the Credit CARD Act that limited service fees to no more than 25% of an account's initial credit limit. Beacom's First Premier Bank credit cards often set initial limits at $300, but carried as many as $270 in account management fees on a cardholder's first statement. Therefore, First Premier products reframed many of the fees as credit card application and processing fees, charged to customer before a new card was issued.

Proposed rule changes would outlaw that behavior, lumping all account-related fees within the first year of credit card issuance under the same 25% cap. Beacom recently told reporters that high service fees mitigated charge-off risks for First Premier Bank and other subprime credit card lenders.

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Joe Taylor Jr. is an internal business consultant for a Fortune 500 company, who writes about finance, culture, and design. He holds a Bachelor of Science in Communications from Ithaca College.