Credit Risk Index Portends Higher Delinquency

The inherent level of credit risk within the U.S. is now 27% higher
than 1998. On a state basis, Mississippi ranks as the riskiest state and
North Dakota at the least risky. The TransUnion “Credit Risk Index”
increased 1.98% from 124.79 in the fourth quarter to 127.26 in the first
quarter. On a year-over-year basis, the “Index” increased 7.10%, the
largest increase for that time period in this decade. The states that
experienced the largest quarterly changes included Nevada (4.25%),
Arizona (4.06%) and California (3.98%). On a year-over-year basis,
Arizona (14.82%), Nevada (14.38%) and California (13.82%) had the
highest percentage increases. TransUnion notes that since the index
remains at an all-time historical high, delinquencies and foreclosures
will likely continue to rise in the coming months. The “Credit Risk
Index” is defined as the weighted average probability of 90-day
delinquency or worse among consumers in a given region relative to the
nation as a whole.


Retail Card Charge-Offs Near 13% Level in May

Fitch Ratings has published the July edition of ‘Credit Card Movers & Shakers’. Credit card delinquencies and charge-offs breached record levels in May as U.S. consumers continued to fall behind and default on their credit cards at record rates. Although excess spread is compressing, the ratings on many trusts have remained stable as issuers have added more credit enhancement and turned on the discount option in order to deal with the souring economy. In addition to latest credit card performance trends, this edition summarizes some of the more recent issuer actions and includes a list of trusts in which excess spread trapping is occurring.

‘Credit Card Movers & Shakers’ is available on the Fitch Ratings web site at under the following headers:

Structured Finance >> ABS >> Newsletters

Fitch’s rating definitions and the terms of use of such ratings are available on the agency’s public site, Published ratings, criteria and methodologies are available from this site, at all times. Fitch’s code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the ‘Code of Conduct’ section of this site.



K. David Holmes III has been appointed VP Global Sales for Universal Air
Travel Plan (UATP). Having been promoted from Regional Commercial
Director, The Americas, Holmes will assume his new role effective
immediately to focus on the recruitment of new airline issuers and
merchants, grow existing UATP Issuer programs and expand UATP’s partner
program with non-traditional forms of payment companies. These program
partners include Acculynk, Bill Me Later, HomeATM, Moneta, PayPal,
Paysafecard, Stored Value Solutions and Ukash. UATP accounts are
accepted as a form of payment for corporate business travel by Amtrak,
airlines and travel agencies worldwide.



hyperWALLET global payment solutions has signed software agreements with
EnStream mobile commerce, to which it will also provide professional
services. The hyperWALLET solution provides the ability to process and
reconcile payments from banks and payment networks and is the foundation
on which EnStream built its mobile payments service. hyperWALLET’s
technology supports payment processing and funds transfers through
international payment networks and banks using established interfaces
with support for international, multi-currency, and multi-language
deployments under a single payment infrastructure. hyperWALLET secure,
global-grade payment technologies has been serving issuers in financial
services, business and government since 2000 with international
payments, card products and financial technology solutions.


7-11 Check-Out Counter Joins Interchange Battle

Between now and August 10th, convenience store giant 7-Eleven is aiming to collect more than one million signatures to send Congress, protesting “unfair” merchant credit card fees. About 6,300 7-Eleven franchisees, licensees and store operators in the U.S. have joined to campaign asking customers, including minors, to sign a petition at every check-out counter. At the conclusion of the campaign, the top signature-gatherers from each of 7-Eleven’s seven U.S. geographical divisions will be flown to Washington to personally deliver the signatures to Congress. The Company says interchange fees are hurting individual small business operators, which represent more than 75% of 7-Eleven stores in the U.S. During 2008, 7-Eleven stores worldwide generated total sales of more than $53.7 billion.


Bling Nation Adds Another Funding Round

Mobile payment provider Bling Nation has secured $8 million in Series A Funding.
Lead investor Lightspeed Venture Partners has provided $6.3 million
with the remaining $1.7 million raised primarily from Meck, Ltd., which
invested an initial $5.3 million in Bling Nation, and CampVentures.
Bling Nation announced June 22, its first bank customer, Colorado-based
The State Bank. The bank went live on May 21 with the Bling Nation’s
Payments Service, which is marketed as Redi Pay Bling, an alternative to
expensive, traditional payments networks and accompanying rewards
programs. Within three weeks of implementation, the bank had activated
25 percent of its customers on the payments network and opened more
merchant accounts in that span than in the past two years combined.



NCR Corporation is the leader in hardware maintenance and support for
retail infrastructure support, ranks number 7 in financial services
infrastructure support and number 10 across all verticals in
infrastructure support based on worldwide revenues for 2006 through
2008. These rankings are according to Gartner Research, which also shows
NCR ranks as number 10 for global hardware maintenance and support
provider across all the industry segments, leads the global market share
in the retail trade segment and is number 7 in the financial services
industry based on studies with 175 service vendors. NCR portfolio of
services are available in the retail, financial, travel, healthcare,
hospitality, entertainment, gaming and public sectors to help businesses
design, deploy, support and manage technology solutions and maximize the
value of current assets. NCR also maintains over 350,000 ATMs around the
world through monitoring, help desk, cash services and vendor
management. These services are made possible with the help of 13,000 NCR
consultants and technical support experts, whom oversee nearly 80
million service actions annually.



The International Card Manufacturers Association (ICMA) has announced it
will now be hosting its Academy Workshop Series in its new MEA workshop
in Dubai, UAE to provide members an opportunity to learn of new industry
trends and techniques to compete in the current economic environment.
Addressing issues affecting professionals throughout the card
manufacturing industry, topics reflecting industry trends, innovations
in security, material alternatives, card testing options, NFC,
personalization and print technology, the MEA workshop in Dubai is to be
held September 30-October 1 of 2009 and will target such card
manufacturing professionals as personalizers, issuers and card
manufacturers. NJ-based ICMA non-profit association of card
manufacturers, personalizers, issuers and related industry participants
has more than 240 members globally.

Details Webinar is Slated

Online training provider will present a webinar
detailing credit card best practices. The webinar, “Credit Cards:
Can’t Live With ‘Em; Can’t Live Without ‘Em; A High Level Overview for
Businesses and Nonprofits, is scheduled for Thursday, July 9, 2pm – 3pm.
Topics to be covered include: card pricing criteria: debit/credit cards,
card brand- and industry-specific pricing; processor and merchant
responsibilities; what happens in a transaction: soup-to-nuts; avoiding
fraud and chargebacks and e-commerce and online donation sites. Marc W.
Halpert will be conducting this webinar. Since leaving corporate
treasury eight years ago, he has started two companies offering
specialized paperless electronic payment services to optimize cash flow
and speed of collections to retailers, small- and medium-sized
businesses and professional and membership groups, and not-for-profit
organizations (e-giving).


U.S. Consumers Digging Their Own Way Out of Debt

Recent figures show 47% of consumers are handling their debt problems
themselves. Additional studies show 11% are getting help from
family/friends; 4% are going to a non-profit credit counselor; 3% are
seeking help of a bankruptcy attorney; and 2% are working with a debt
settlement company. The findings were concluded through a national
telephone poll of 500 female adult and 500 male adult interviews
conducted for by GfK Custom Research North America in June of



In the battle against credit card practices adversely impacting smaller
merchants, the Canadian Federation of Independent Business (CFIB) is
challenging Visa, Mastercard, chartered banks and card processing
companies to adopt a Code of Conduct on behalf of the small business
sector. Pleased governments are paying close attention to this issue,
CFIB is calling on credit card companies and the banks to adopt a Code
of Conduct for small businesses with a focus on 10 principles. As an
alternative to strict regulation of the industry, these principles
include the assertion premium cards should never be distributed without
cardholder request; merchants should know the total fee associated with
a card prior to acceptance; merchants should be able to refuse any card
or assess a fee for acceptance; merchants should be able to exit a
contract without penalty under changed terms; and credit card companies
should never introduce a “percentage of sale” fee in the debit card



Delinquency and charge-offs amongst credit card-backed securities hit record highs again in May. Charge-offs leapt 50 basis points while 60-to-180 day delinquency nudged up by 20 basis points. The Fitch “Charge-off Index” increased for the fourth straight month in May to 9.1%, compared to 8.6% in the prior month and 6.4% one-year ago.
Fitch says it is particularly concerned that the increase in charge-offs is a result of the increased roll-through of delinquencies, with the stress on consumer payments brought about by the deterioration in the UK economy expected to continue throughout 2009. In May, the Fitch “Delinquency Index” increased for the ninth month in a row, moving to 5.5% from 5.3% in April and 3.7% in May 2008. On an individual trust basis, six of the eight trusts included in the “Index” reported new historical high delinquency levels in May. Fitch also reports that its “Monthly Payment Rate Index” fell 10 basis points in May to 15.4%. However, the Fitch “Yield Index” increased to 20.0% in May, compared to 19.4% in April.