MMA encourages credit card reform 

MMA Praxis Mutual Funds behind shareholder effort to protect investors, consumers

GOSHEN, Ind. – MMA is encouraging national credit card companies to reform their practices and avoid predatory practices that hurt consumers and investors. Practicing social and environmental responsibility is part of the investment strategy for MMA’s Praxis Mutual Funds.

As a result, MMA has joined the Interfaith Center on Corporate Responsibility (ICCR) to encourage the nation’s three largest credit card companies, through shareholder resolutions on their ballots, to change practices that are harmful to their consumers and investors.

These harmful practices, shareholders say, helped build up nearly $1 trillion in high-cost, unsecured debt that is burdening consumers and undermining critical financial institutions at the heart of the current economic downturn.

"Citigroup, JPMorgan Chase, and Bank of America drive more than 60 percent of the credit card business in the United States. Their past practices, intentional or not, played a significant role in shaping the over-leveraged consumer lending environment we have today. We are calling on these important companies to do more than make incremental improvements in their practices. Our economy – and the banks themselves – need new models for consumer lending that strengthen borrowers, rather than weaken them," said Mark Regier, Stewardship Investing Services Manager for MMA Praxis and lead filer for the resolution at JP Morgan Chase. Concerned investors are also in active discussions with American Express, Discover Card, Capital One, and Wells Fargo on similar issues.

The resolution seeks the creation of a report to shareholders reviewing company practices related to credit card marketing, lending, and collections with particular attention on those that can be considered predatory or abusive. These tactics include universal default policies, bait-and-switch marketing tactics, hidden fees, and intentionally complicated cardholder agreements. While some approaches have been abandoned under increased public and regulatory scrutiny, shareholders are concerned that too little attention has been focused on the human and economic impact of past practices and the need for more sustainable and transparent approaches.

“Identifying and addressing the social and economic implications of short-sighted business practices is not something new for our organization,” said Laura Berry, Executive Director at the Interfaith Center on Corporate Responsibility. “For over a decade. ICCR members have warned of the gathering storm in consumer credit. Since 2004, our institutional investor members have participated in 166 corporate engagements at over 100 companies. By adopting clear new standards, financial services companies can demonstrate a true commitment to their current and future customers.”

“As religious and socially concerned investors, we are driven to be engaged in this issue, which has a negative impact on vulnerable communities, places shareholder assets at risk, and is hindering the prospects for our nation’s economic recovery,” said Regier. “For more than 10 years, the costs of living have increased sharply, while savings and real wages were stagnant. High-cost credit card debt has filled this gap. Short-term profits and the promise of “easy credit” eclipsed responsible lending practices and the need for increased financial literacy. This simply cannot continue.”

Investors should consider the investment objectives, risks, and charges and expenses of the MMA Praxis Mutual Funds carefully before investing; this and other information about the Funds is in the prospectus, which can be obtained by calling (800) 9-PRAXIS or at www.mmapraxis.com. Read the prospectus carefully before you invest. MMA Praxis Mutual Funds are distributed by IFS Fund Distributors, Inc., member FINRA/SIPC. Investment products offered are not FDIC insured, may lose value and have no bank guarantee.

As of May 1, 2009, BHIL Distributors, Inc. (Member FINRA) became distributor for the MMA Praxis Mutual Funds.

April 2009