After applying new criteria to the world’s thirty-seven largest banks, Standard and Poor’s downgraded credit ratings of dozens of banks including several of the largest banks in the U.S. After a rough year with an inconsistent economic recovery, european debt worries and volatile markets, the financial industry is now suffering this latest blow to their once renowned level of consumer confidence.

To excacerbate the situation, credit unions, smaller regional banks and prepaid card companies continue to chew away at market share that has long been controlled by these financial behemoths. The federal government has also been a thorn in big banking by passing ground-breaking legislation that is thought by some to be curbing bank profitability.  Standard and Poor’s has implemented a new ratings methodology that evaluates bank’s creditworthiness based on economic and industry risks, bank-specific strengths and weaknesses, as well as the “likelihood of external government or group support.”

Among the list of banking institutions that S&P downgraded, some notable ones include:

• Citigroup (NYSE: C) – dropped from A to A- with a “negative” outlook
• Morgan Stanley (MS: NYQ) – dropped from A to A- with a “negative” outlook
• Bank of America (NYSE: BAC) – dropped from A to A- with a “negative” outlook
• Goldman Sachs (NYSE: GS) – dropped from A to A- with a “negative” outlook
• Wells Fargo (NYSE: WFC) – dropped from A+ to AA- with a “negative” outlook
• JPMorgan Chase (NYSE: JPM) – dropped from A+ to A with a “stable” outlook

Prepaid institutions are watching closely as the Federal Reserve bank orders simulated stress tests to see if some of the country’s largest financial institutions can withstand another market meltdown as we witnessed in 2008. Watchdog groups like the “Occupy” movement combined with a growing number of unhappy or unqualified bank customers and government regulation might present a huge opportunity for General Purpose Reloadable (GPR) plastic card issuers and operators, otherwise known as prepaid card companies.