MAN BUILDS FIRM THROUGH DIFFERENT SORT OF CREDIT REPORT : WHISTLE-BLOWER.

Byline: David Dishneau Associated Press

Robert McKinley may deserve credit for keeping bank card issuers honest, but his first loyalty isn't to consumers.

Yet while he makes most of his money from banks, he's hardly the financial industry's lap dog.

So to whom does McKinley pledge allegiance? That's easy.

``To me!'' the robust founder of RAM Research Group said with a booming laugh. ``To us!''

RAM, the company McKinley founded 10 years ago in his basement, is indeed the prime beneficiary of his balancing act. From a converted red-brick house on the edge of downtown Frederick, RAM gathers and dispenses reams of credit card information to consumers and bankers alike.

The booming business has made its engaging founder a widely quoted authority on credit card deals and misdeeds, as well as a consultant to banks pondering new twists to their plastic products.

``It serves our purposes to keep him advised of what we're doing. He's fun to talk to about what he thinks the consumer is going to do,'' said Beverly B. Wells, president of bank card services for North Carolina-based Wachovia Corp.

RAM's chief asset is its credibility, which McKinley and his 20 employees preserve by reporting exhaustively on their monthly surveys of 500 banks, highlighting good deals and calling foul on deceptive practices.

For example, RAM's CardTrak newsletter, which is sent to 1,500 media outlets, blew the whistle in 1990 on two-cycle billing, a way of computing interest that lets card issuers make more money on people who don't pay their balances in full.

McKinley also recently criticized Capital One, a Falls Church, Va., bank, for offering its customers a $20 ``enhanced'' option of lowering their minimum monthly payments.

``Anyone who knows anything about the card business knows that if you make the minimum payment, the 2 percent per month that they ask for, you will never get out of debt. It takes 30 years to clear a $2,000 debt,'' McKinley said.

Sometimes banks cancel their $1,000 subscriptions to RAM's quarterly Bankcard Update report, but most come back, he said.

``We just call it like it is and we take the hits,'' McKinley said in an interview during a rare break in his 60- to 80-hour workweek. ``We just try to provide the best information we can for consumers and stick up for consumers if we see something we really think is out of line.''

He traced his upright attitude to a strict Jehovah's Witnesses upbringing in a Hagerstown, Md., home headed by an electrical engineer father and homemaker mother. An early interest in electronics led to a series of technical jobs with area radio and television stations, which gave him a grasp of the news business.

In high school, McKinley began reading The Wall Street Journal - now a RAM subscriber - which sparked his interest in financial matters. By age 19 he had built and sold his first business, a Muzak-style background music enterprise.

Consumer newsletter

McKinley was 30 and working at a Washington television station when he decided to publish a consumer newsletter on his home computer. He was considering the already crowded field of mutual fund publications when he stumbled across an ad for an 8 percent credit card from a bank in Arkansas.

``I thought this was great,'' he said. ``All the credit cards I had were 18 percent and all my friends' were at that level. I contacted the bank, got the application, it was approved and sent back.''

He found no one publishing extensive lists of credit card rates, so he started contacting banks and compiling data.

``My first interest was to serve consumers. I didn't even realize there was a larger void on the industry side,'' McKinley said.

His initial mailing to newspapers got a mention in the Minneapolis Star Tribune. That yielded at least 40 orders for McKinley's 50-cent publication, which he now sells to consumers for $5.

RAM - the initials are those of McKinley and his wife, Anita - also caught bankers' attention. Suddenly, there was a single source of information about their competitors - and a new way of reaching vast numbers of potential customers.

``He has extolled the virtues of cards he liked, that were simple and straightforward and that had reasonable rates, and that probably shaped the industry as a whole,'' said Jeff Sandefur, vice president of marketing for Armed Forces Benefit Association, owner of AFBA Industrial Bank in Colorado Springs, Colo.

AFBA and Wachovia are both investors in RAM's newest venture, a World Wide Web site that puts RAM's research on line and offers direct links to as many as 12 different banks.

McKinley sees the Internet as the key to maintaining the 100 percent annual revenue growth RAM has enjoyed since its inception. He said the Web site, created and managed by his sons Devek, 21, and Erian, 18, is keeping RAM ahead of competitors that have arisen.

``I enjoy the competition. There is so much going on in this business,'' McKinley said. ``There are winners and losers every day.''

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Photo

Photo: Robert McKinley holds up some of the credit cards his firm reports on for industry and consumers.

Associated Press