Coalition for New Credit Models is Formed

The Coalition for New Credit Models is being launched today.
The Coalition is made up of non-profit, for-profit, and social enterprises using new technologies, products and business models to provide credit and information to millions of consumers and small and midsized businesses. The Coalition is asking Congress to:
Administration:
1. Adopt legislation classifying person-to-person lending as a consumer banking service, not a securities offering.
2. Create a liquidity fund to provide capital for companies making small consumer loans to underbanked individuals.
3. Establish a federal backstop for small and mid-sized businesses to provide access to working capital through electronic marketplaces.
4. Enable the emergence of a robust U.S.-based private company stock market to provide the exit path necessary to attract investment capital back to this country, bolstering domestic small businesses, innovation and job growth.
5. Create a Start Up Liaison at Treasury Department or within banking regulators to guide and fast-track the development of new financial products by start-up companies and organizations seeking to innovate the way consumers and businesses raise and access capital.

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AUG LEI

The Conference Board Leading Economic Index (LEI) for Germany increased
by 1.3% while The Conference Board Coincident Economic Index (CEI)
decreased 0.2% in August. With the 1.3% increase in August, the
Conference Board LEI for the Germany now stands at 90.1 (2004=100)
after having increased 0.9% in July and increased 1.1% in June.
Meanwhile, the CEI decrease for the month was preceded by no change in
either June or July to now stand at 101.6 (2004=100). LEI results for
the month were attributed to positive gains in 5 of the 7 components
increasing, which include stock prices, new orders in investment goods
industries, yield spread, consumer confidence and inventory change
series while negative contribution was seen in residential construction
orders and gross enterprises and properties income.

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TCF Joins the Overdraft Overhaul Bandwagon

MN-based TCF is among the latest banks to revise overdraft fee policies that impact debit card transactions. In the first quarter of next year TCF will introduce “TCF Convenience Checking” that will offer debit cards without annual fees. Rather than charge a per item NSF fee, accounts with a negative account balance of more than $5 will be assessed a single daily fee until the account returns to a positive balance; no fees will be charged for checks or other items that are returned due to insufficient funds; and accounts with balances below a required minimum will be charged a monthly tiered minimum balance fee.
Last month Wells Fargo said it will eliminate overdraft fees for customers when they overdraw their accounts by $5 or less and will charge no more than four overdraft fees per day. Chase also announced it will eliminate overdrafts for debit cards unless the customer opts in to overdraft services; modifying the posting order to recognize debit-card transactions and ATM withdrawals as they occur; eliminating overdraft fees if a customer’s account is $5 or less overdrawn and reducing the maximum number of overdraft fees per day to three from six. (CF Library 9/23/09; 9/24/09)

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NOKIA & TANLA

Tanla Solutions Mobile Payments has signed a five year frame agreement with
Nokia for License Management, mPayments and related professional
services. Already been installed on a hundred million Symbian based
devices, the Tanla “License Manager” integrates application rights
management and payments, enabling in-application billing, try before you
buy, subscription and many other business models on the handset.
Meanwhile, the Tanla “Mobile Payment” service is to enable on Nokia
device transactions, as it currently does in 160 countries through
“Mobile Operator” and “Credit Card billing” by a number of leading
Software Vendors, Application Developers and Content Providers for
secure transactions.

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Bill Me Later Inks eBay and PayPal

eBay and PayPal are now
offering Bill Me Later as a payment option during checkout.
On eBay, Bill Me Later will be available as a payment option for both
Buy It Now and approved auction purchases. Qualified customers can also
use Bill Me Later at tens of thousands of their favorite online
merchants that accept PayPal Express Checkout. When customers select the
PayPal checkout button, Bill Me Later will be available as a funding
choice along with their stored PayPal balance, bank accounts or credit
cards. Customers select Bill Me Later as their funding choice and follow
simple steps to take advantage of the payment flexibility, convenience
and security that Bill Me Later offers. Bill Me Later uses a real-time credit model to make
decisions about credit within seconds, so consumers don’t have to
complete a lengthy application prior to making a purchase. PayPal
customers will be able to access their Bill Me Later statements directly
from their PayPal accounts, with the option to pay their Bill Me Later
balances with PayPal.

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First Data and Yahoo! Small Business Partner

First Data has partnered with Yahoo! Small Business to provide
easy-to-implement eCommerce solutions for small and mid-size merchants
seeking to extend their businesses to the Internet.
First Data will provide merchants with point-of-sale terminals and payment processing
services to complement Yahoo! Merchant Solutions and Web Hosting
subscription-based products, which allow small businesses to set up
their online stores and catalog web sites with simple design tools and
tracking features.

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GE to Issue the Lumber Liquidators Card

GE Money has signed a multi-year agreement with hardwood specialty retailer Lumber Liquidators to provide
consumer financing. The Lumber
Liquidators credit card offers consumers a no annual fee card with
special financing options and online account management. The card is
managed by GE Money’s Sales Finance unit, which provides billions of
dollars of consumer financing through more than 145,000 small business
locations on Main Streets across the United States.
GE Money provides credit card programs and financial services for consumers
through dealers; national, regional and independent retailers;
associations; contractors; manufacturers; healthcare practices; and
service providers in nearly 20 industries.

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More Stores Re-Launch Christmas Club Gift Cards

After being shelved for years due to high administrative costs, “Christmas Club” store cards are back. Stage Stores has joined Sears and Kmart in launching new cards this season, according to CardTrak.com.
Beginning October 16th, Bealls, Goody’s, Palais Royal, Peebles and Stage will offer a “Christmas Cash Club” that will reward customers with $10 for each $100 they load on their Cash Club gift card. Also, rewards will be earned based on the card’s balance on November 21st. With the Sears “Christmas Club” gift card, customers can deposit funds on the cards and be eligible for a 3% reward. Also, customers who activate cards through October 31th, earn the 3% reward based on the card balance on November 14th. The new “Christmas Club” card can only be used at Sears/ Kmart and the maximum reward value is $100.

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Late Stage Delinquency Begins to Decline in Q3

Over the past twelve months average managed delinquency (90+ days) among the nation’s top three issuers increased 84 basis points, rising from 2.12% for 3Q/08 to 2.96% in 3Q/09. However, for the first time since the start of the recession, delinquency rates began to decline the third quarter, according to CardData. All three major issuers reported sequential declines in their late stage delinquency rate. Chase reported that its managed delinquency rate for the third quarter was 2.76%, up from 1.77% in the prior year, but down from 3.25% in the prior quarter. BofA reported that third quarter delinquency for its global cards declined to 3.76%, compared to 4.21% for 2Q/09, but up from 2.88% one-year ago. Citi posted managed delinquency for its North American cards of 2.37% for the third quarter, compared to 2.62% in the second quarter and up from 1.73% in the third quarter of last year. For complete details on third quarter results visit CardData (www.carddata.com).

DELINQUENCY HISTORICAL
BofA* Chase Citi**
3Q/08: 2.88% 1.77% 1.73%
4Q/08: 3.16% 2.34% 2.16%
1Q/09: 3.99% 3.22% 2.60%
2Q/09: 4.21% 3.25% 2.62%
3Q/09: 3.76% 2.76% 2.37%
* Global Cards
** North America cards
Source: CardData (www.carddata.com)

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Retailers Face Serious Bargain Hunters in 2009

With 65% of Americans foreseeing an economic impact on their holiday plans, 84% are spending less. Also, 55% will be shopping for sales more often; 42% are using more coupons; 34% are reusing decorations; 36% are planning to buy more practical gifts; 17% will be purchasing joint gifts; 16.7% will make gifts; and 29% are traveling less or not at all for the holidays. Additional findings, according to NRF’s 2009 “Holiday Consumer Intentions and Actions Survey” by BIGresearch, show U.S. consumers plan to spend an average of $682.74 on holiday-related shopping, 3.2% less Y/Y; 43.3% say sales and price discounts will most determine where to shop; 70.1% of shoppers will purchase from discounters; 55.8% will also shop at department stores; 42.4% will shop on the Internet; and 11.4% of shoppers plan to buy gifts at thrift stores/resale shops. Concerning recipients, 55.2% would like to receive a gift card this holiday season, 48.8% want clothing, 48.6% asked for books and DVDs while 33.2% want electronics. The NRF expects holiday sales to decline 1.0% to $437.6 billion.

XMAS GIFT POPULARITY
Gift Cards: 55.2%
Clothing: 48.8%
Books/DVDs: 48.6%
Electronics: 33.2%
Source: NRF

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Americans More Willing to Accept POS Biometrics

A new survey has found that 65% of Americans are at least very
concerned about identity theft and 64% feel the same way about credit
and debit card fraud. However, 58% are willing to provide biometric data to
merchants and financial institutions to verify and authenticate their
identity. About 93% said they would be willing to use fingerprint scans,
while 79% are willing to use iris recognition. The Unisys “Security
Index” says that is an increase of 20% and 17%, respectively, since
consumers were surveyed in November of last year. Americans who are
seriously concerned about the security of their online transactions rose
to 42%, the highest level since the “Index” began two years ago. Only
22% of Americans fully trust government agencies to keep personal
information secure and private and the proportion is only slightly
better (29%) with regard to trust in data protection by financial
institutions.

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PAYDAY LOAN REGS

National Money Mart, the lowest cost payday loan provider in British
Columbia below the government’s rate cap, is welcoming regulation of the
payday loan industry in the Province effective November 1, 2009. With
this, British Columbia is allowed to implement its own rates and
regulations with respect to the governance of payday lending which, in
combination with Nova Scotia and Ontario, account for over 75% of Money
Mart’s company-operated store base. Money Mart is a founding member of
the Canadian Payday Loan Association (CPLA) that has been working for
five years towards provincial regulation of the industry while its
parent global store network consists of 1,206 stores, including 1,031
company-operated financial services stores and 175 franchised and agent
locations in the United States, Canada, United Kingdom, Republic of
Ireland, and Poland.

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