Brian Wenzel: Yeah. Thanks, Brian. So first, let me just be clear. We have submitted our capital plan to the Fed. We’re part of the horizontals. We’re part of the CCAR group, albeit, we do not get a stress capital buffer until 2026. So the process remains somewhat the same as in prior years, other than we’ll engage a little bit differently with the Fed than we have in the past. But again, the stress capital buffer comes in 2026. When you specifically look at the capital plan that our Board just approved and management presented to them, there were scenarios or scenario in there around late fees and the impact of late fees that doesn’t — that informed our overall capital decision but didn’t necessarily restrict the plans that we had.
Even if I came back and said I had an earlier implementation date, which we talked a little bit on this call, that would not necessarily interfere with our capital targets and our plans. Again, all that’s subject to the normal things we’d say is the market conditions and everything else, Brian. But the impact of the late fee rule doesn’t necessarily impact the capital plan that we announced this morning.
Brian Foran: That’s very helpful. And maybe if I could sneak in on competition. Are you generally seeing competitors in the market respond in common ways on these kind of PPPC efforts? Is there any evidence of any points of big divergence or people breaking from the pack or is kind of everyone doing different combinations of similar things?
Brian Doubles: We only see what’s out there in terms of public changes in terms. But I would tell you my expectation is that everybody’s going to do a combination of the same things that we’re doing. It’s a pretty — I think it’s a relatively standard playbook. You might see some issuers do a couple of things differently, but I think, on the whole, it’s going to be APR increases, different types of fees, etc., to offset this. And it’s important that we do. Our goal from the beginning has been to protect our partners and continue to provide credit to the customers that we do today. And unfortunately, that’s impossible to do without these offsets.
Brian Wenzel: The only thing I’d add, Brian, I do think the one thing you will see, we probably have been a little bit more — or probably showed a little bit more sense of urgency and gotten out ahead of this based upon discussions with our partners. So that may pay a little, but I think Brian’s right, over the medium term here, that’s where you’re going to see the convergence.
Brian Foran: Thank you.
Brian Wenzel: Thanks, Brian. Have a good day.
Operator: Thank you. We’ll take our next question from John Pancari with Evercore. Please go ahead.
John Pancari: Good morning. Some of your — on that very last point that you just brought up, some of the pure card lenders that have somewhat smaller private label and co-brand card businesses have begun to indicate maybe a willingness to absorb the late fee — the foregone late fees as a result of the rule change. Can you talk about, if we do see that happen at some players where late fees are a smaller piece of their overall revenue but they’re in the private label and co-brand business, do you view that as a competitive threat if they do absorb the impact?
Brian Doubles: I don’t see it as a competitive threat today. I think in our space and the vast majority of our business, I think you’re going to see issuers do the same types of things that we’re doing. I think it’s going to be really important in terms of the economic sharing with the partners. I think we’re obviously focused on providing credit to the customers that we do today. And unfortunately, you need to do some of these things in order to protect that and protect our partners. So I do think you’ll start to see — we’re starting to see this now. You’ll start to see some issuers. We’re building this into pricing models as we look at new business. We’re starting to build it as we bring on portfolios from our competitors, you’ve got to contemplate an $8 latency.
You have to assume that while we’re hoping for a better outcome on the litigation, obviously you got to build in scenarios where we have a much lower late fee. So I think it’ll even out over time across the industry, primarily in the space that we operate in today.
Brian Wenzel: The one thing, John, you just take it up a level for a second. So if you had a theoretical case where someone who has a smaller business than ours decides to absorb some of that late fee, what you end up into is a sub-optimal return profile. And inside a large institution, while it may be immaterial, the question would be, does it attract capital, and how long can you sustain that? And we’ve seen over history, businesses come out of flavor in certain larger institutions where this is a smaller part, this is what we do in the same way that we look inside our businesses, our platforms, and allocate capital to some of our better performing, higher returning portions of the portfolio. That I think over time will have to happen in these institutions. So I’m not sure that that’s a long term viable strategy if someone wants to do that. But again, it’s very theoretical, your question.
John Pancari: Got it. No. That makes sense. Thanks for that. And then separately, back to the EPS, sorry to belabor that, but I know you’re not reiterating that $5.70 to $6 guide. And just so I understand, it’s just because it was only 45 days ago, and the underlying components that you had baked in at that point in March have not changed materially enough to change how you’re thinking about your underlying trends? I know we’ve had moves in rates, had some development on the late fee dynamics, but I just want to make sure that the core expectations that were part of that $5.70 to $6 have not changed at all.
