this ceo is being honest and yet the stock just laughs it off and is up 530% since march with no earnings for a least 2 years. this si what crashes are made of. One CEO sees flat to shrinking credit card industry Consumer de-leveraging to be 'powerful force,' Fairbank saysExplore related topics Banks Capital One Financial Corp American Express Co Story Quotes Comments Screener (7) Alert Email Print ShareBy Alistair Barr, MarketWatch SAN FRANCISCO (MarketWatch) -- The credit-card industry probably won't grow or will shrink in coming years as a powerful wave of consumer de-leveraging washes over the business, Capital One Financial Chief Executive Richard Fairbank said Wednesday. Fairbank also said the credit card and banking company is seeing encouraging signs of stabilization in some of its consumer businesses, but stressed that it remains cautious. "In this era, de-leveraging of the consumer will be a very powerful force," Fairbank said during a presentation to analysts and investors in New York. The CEO said he was in favor of consumers reducing their debts because this will mean they will be less likely to miss credit card payments in future. "It's very healthy to have a de-leveraged consumer," Fairbank added. "We as lenders will be paid through better credit performance." Credit-card companies like Capital One /quotes/comstock/13*!cof/quotes/nls/cof (COF 38.54, -0.46, -1.18%) and American Express /quotes/comstock/13*!axp/quotes/nls/axp (AXP 35.69, -0.15, -0.42%) have been hit hard as surging unemployment leaves more people struggling to repay debts racked up on their credit cards. Fairbank said Wednesday that credit-card losses have been very closely tied to unemployment rates and house-price depreciation during this recession. "As home prices start to stabilize and there's a line of sight for unemployment reaching a peak, that's encouraging," the executive added. He also noted "inflexion points" in some parts of Capital One's consumer businesses, where elevated levels of loan charge-offs are close to stabilizing. Still, expenses from adding to loan loss provisions will remain elevated over the near term, Fairbank said. Over the next year or more, Capital One's consumer businesses will be in "shrinking mode rather than growing mode," he added. The overall credit card industry will likely be similar to the 1990s, when there was more of a level playing field and competitors differentiated themselves through underwriting skills, rather than by "throwing spaghetti against a wall and seeing what happens," he explained. "The difference is that the card business will be flat to shrinking rather than growing," Fairbank said. While new credit-card regulations may reduce industry returns a bit, the current revenue model for the business will remain intact, he added. The changes will also present opportunities for Capital One because they play to the company's competitive strengths, Fairbank said. Capital One shares rose 3.9% to $38.88 during afternoon trading on Wednesday. The shares are up 22% so far this year.