Illinois Governor Signs Card Marketing Law

The Governor of Illinois has signed “The Credit Card Marketing Act” to
stop credit card marketing at college campuses. The new law promotes
responsible credit card marketing at Illinois colleges and universities.
The legislation bans free gifts and makes contracts between the credit
card providers and schools open to the public. The legislation prohibits
the transfer or sale of student names and contact
information to credit card issuers. It also requires colleges and
universities to offer consumer finance education to freshmen if credit
cards are marketed to undergraduates. Credit card companies use free
gifts, coupons and food to entice cash-strapped college students into
applying for credit cards, which often carry low introductory
rates but also have hidden fees and high default interest rates.

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Consumer Spending Index Heads Up in July

The Deloitte “Consumer Spending Index” rose in July thanks mostly to unemployment claims having dropped sharply over the past three months and tax burdens having fallen in conjunction with the weakening economy to levels not seen in 50 years. Combining with real wages (up 4.5% since the year-ago period) and the slowed drop in real home prices, the index rose 2.15% from an upwardly gain of 1.85% seen in June. Last month, initial unemployment claims remained at a historically high level, but were showing signs of bottoming out; real wages flattened over the previous several months due in large part to weakness in the job market; and the decline in real home prices appeared to be ending. The Index attempts to track consumer cash flow as an indicator of future consumer spending. (CardFlash 7/14/2009)

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SCM READERS

SCM Microsystems security solutions has launched its “SCR3500
SmartFold”, the “SCT3511” and the “@MAXX lite” smart card reader models.
The new compact handheld, USB or NFC connected readers are for use with
contact or contactless smart cards regardless of technology or
manufacturer. Offering a single small device for all smart card-related
needs, the SCM readers solutions secure identities for bank payment
cards, employee access badges, government identity cards and healthcare
IDs. Available through both OEM and distribution channels, the “SCR3500
SmartFold” smart card reader fits easily on a key ring and provides
online services access from anywhere through USB ports; the “SCT3511”
USB token offers both ISO 14443 and “MIFARE” contactless capabilities
for ID-000 (SIM card format) smart cards and can be used for secure
physical access to the buildings; and the “@MAXX lite” token with both
contact and contactless smart card-based functionalities adds on-board
Flash memory for secure storage of sensitive data using encryption on a
hard disk and the onboard Flash memory.

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JUNE LEI

The Conference Board Leading Economic Index (LEI) for Spain increased
0.2% while The Conference Board Coincident Economic Index (CEI)
decreased 0.4% in June. With the 0.2% increase in June, The Conference
Board LEI for Spain now stands at 106.0 (2004=100), which declined 0.1%
in May and increased 0.2% in April, while the CEI now stands at 101.2
(2004=100) which decreased 0.6% in May and decreased 0.5% in April. LEI
results for the month were attributed to positive gains in Spanish
equity price index, order books survey, and inverted long-term
government bond yield while negative contributors included the capital
equipment component of industrial production and the Spanish
contribution to Euro M2.

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Fortrex to Offer Visa PA DSS Services

MD-based PCI-DSS assessment service Fortrex Technologies is now
assisting clients through its PA DSS assessment services with Visa’s
new payment application security two phase mandates. Fortrex offers the three mainline PCI DSS services and has expanded its PCI
services to include PCI Pre-assessment Gap Analysis and Self Assessment
Assistance. Fortrex has been in the PCI Security Standards Council program since
its inception and holds all of the applicable certifications required (QSA, ASV &;
PA QSA). These security mandates require full
compliance by July 1, 2012 and for newly boarded merchants that use payment
application software must use PA-DSS compliant applications or be PCI
DSS compliant
July 1, 2010.

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PayPal Introduces a U.S. Student Card

PayPal has launched the “Student Account” for U.S. teens to shop online
using PayPal and in stores
with the Student Card in time for back to school.
The “Student Account” eliminates the hassle of everyday money exchange
between parents and teens, while giving teens the chance to learn good
spending habits through the experience of being responsible for their
own money. Parents can establish up to four PayPal sub-accounts for
their teens, transferring funds into those accounts when needed, on a
one-time or recurring basis. Since the parents’ and teens’ accounts are
linked, parents have full
visibility into their teen’s account balance, spending habits and
budgeting skills.

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Bon-Ton and HSBC Expand Card Partnership

HSBC Bank has signed a “Third Amendment” with PA-based retailer Bon-Ton.
Under the agreement, which is in effect through June 20, 2012, Bon-Ton
continues to participate in the revenue generated by credit sales. “The
Third Amendment to the Credit Card
Program Agreement” defines additional protection for the credit lines of
Bon-Ton credit card customers, as well as revises
the compensation the Company will receive for certain types of sales
made on the credit cards and provides that the Company and HSBC will
share certain losses associated with the Credit Card Program. The Third
Amendment provides that either party may terminate the Third Amendment
between April 1, 2010 and July 31, 2010 upon providing notice and making
a cash payment to the other party. The impact of the Third Amendment on
Bon-Ton’s financial results is estimated to be a cost in the range of
approximately $5 million to $9 million per year and was reflected in the
Company’s fiscal 2009 guidance previously provided in the first quarter
of fiscal 2009.

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JUNE ABS

Delinquency amongst credit card-backed securities began to ease in June after surging to record levels all year. However, charge-offs continued to set new records approaching double digits, with some credit card trusts near the 12% level. Charge-offs leapt 70 basis points while 60-to-180 day delinquency nudged down by 10 basis points. The Fitch “Charge-off Index” increased for the fifth straight month in June to 9.8%, compared to 9.1% in the prior month and 6.9% one-year ago. Fitch says it is particularly concerned about the change in the make-up of charge-offs in the first half of 2009, with increasing amounts of chargeoffs originating from accounts rolling through the delinquency buckets, as cardholders experience more difficulties in making their monthly payments. Also, the increase in the use of debt management programs has also been a major concern; cardholders who have already displayed difficulties in servicing their debts continue to be exposed to increasing economic stress, which is likely to lead to an acceleration in reported charge-off increases in the longer term. In June, the Fitch “Delinquency Index” decreased, after rising for nine consecutive months, moving to 5.4% from 5.5% in May and 3.7% in June 2008. As the economic downturn continues to hit the U.K., Fitch expects that further rises in unemployment, together with high levels of borrowing for U.K. consumers, will continue to exert stress on cardholders, resulting in increasing delinquencies as they struggle to meet their debt obligations.

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RBS WorldPay to Market VeriShield Protect

RBS WorldPay has inked a deal to market VeriFone’s “VeriShield Protect” end-to-end solution for encrypting payment card data. The VeriFone solution uses AES-level encryption that preserves existing card track data formats so it works transparently with retailers’ existing payment infrastructure. Because “VeriShield Protect” preserves the format of the card data there is no need to redesign the POS applications to deal with a new data format. In addition to encrypting card data, “VeriShield Protect” monitors all systems in real time at the device level via “VeriShield Secure Device Management Service,” so if a breach occurred the retailer would be immediately alerted. In addition, data encryption keys can be managed remotely as part of the device management service.

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Maiberry to Utilize Mocapay M-Marketing

Mobile loyalty program provider Mocapay will launch a mobile marketing
program for CO-based frozen yogurt retailer Maiberry. The
partnership with Mocapay will enable Maiberry to spread the word about
their brand through the use of mobile marketing services.
Through various promotional events, collateral, and SMS text campaigns,
Maiberry will encourage consumers to visit their stores via special
offers. CO-based Mocapay provides the only mobile commerce platform
that supports
integrated mobile payments, marketing and distribution at point-of-sale.
Mocapay delivers unequaled direct marketing opportunities and customer
loyalty to merchants while providing consumers with the unprecedented
ability to transact simply and securely with their mobile device and
receive real-time promotions from their favorite retailers.

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PREPAID SUMMIT

VRL has announced its 2009 “Prepaid Cards Summit” agenda. In association
with Visa and Mastercard, the “VRL Prepaid Cards Summit” will be held in
Rome on November 12-13, 2009. The Summit hopes to address research on UK
and Italian consumers focusing on their attitudes and awareness of both
closed and open loop prepaid cards. In doing so, the VRL Conference will
focus on offering attendees unique insights and knowledge from keynote
speakers; insight on unique VRL research on consumer attitudes on
prepaid cards across the region; and an opportunity for networking with
350 key people in prepaid and 200 merchants across Europe.

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CO-OP Financial Completes a CU Fund Raiser

A credit union fund raiser combined with the Miracle Match program
from CA-based CO-OP Financial Services has raised nearly $1 million for Children’s Miracle Network.
Through June 30, credit unions have raised $517,000 and CO-OP Miracle Match
donations have added $445,000 for a total of $962,000 to CMN. CO-OP is
committed to donating up to $1 million of matching funds in 2009, and the company
expects this pool to be fully utilized based on fund raisers planned for the remainder
of the year. Among the key developments in this year’s effort, the Miracle Match
program has inspired credit unions to conduct 10 new fund raising events for CMN.
These events are significant because they are either the first CMN fund raiser the
credit union has ever conducted, or are in addition other annual events. Credit
unions raised $64,000 through these events, and Miracle Match donations from CO-OP totaled
$88,000.

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