TNB Signs DESCO FCU for Card Processing

Ohio-based DESCO FCU has converted its credit card processing to Dallas-based TNB Card Services. DESCO FCU has 25,000 members and $180 million in assets. It serves counties in southern Ohio and northeastern Kentucky. The credit union has six branches in addition to its main office in Portsmouth. TNB Card Services, owned and directed by credit unions, provides full-service credit and debit card processing, serving more than 450 financial institutions and managing more than 1.6 million cards,

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WaMu’s Credit Card Goes National in Oct

Washington Mutual says it will launch a mid-October direct-mail credit card marketing campaign to its customers following its merger with Providian, which was completed today. The new Washington Mutual Card Services Division will be introducing a Washington Mutual-branded credit card over the next year. Providian CEO Joseph Saunders will continue to lead the credit card business from San Francisco as president of the new WaMu card division. In June, Providian announced it was being acquired by Seattle-based WaMu for $6.45 billion. Providian has the nation’s 9th largest general purpose credit card issuer with $18.6 billion in card outstandings, according to CardData ([www.carddata.com][1]). (CF Library 6/6/05)

[1]: http://www.carddata.com

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Diebold Puts Weber on the Board

Diebold has elected Alan Weber, recently retired as chairman and CEO of U.S. Trust Corporation, to its board of directors, effective October 1st. Prior to joining U.S. Trust in October 2002, Weber was vice chairman and chief financial officer at Aetna, Inc., where he was responsible for capital management, information technology, investor relations, e-business and financial operations. Weber currently serves as a director of ComputerRepair.com, an IT services company he helped establish. He received a bachelor’s degree in economics from the Wharton School at the University of Pennsylvania, and an M.B.A. from the Kellogg School of Management at Northwestern University. Diebold is a global leader in providing integrated self- service delivery systems, security and services with reported revenue of $2.4 billion in 2004.

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The Debit Card Code is Strengthened

Effective October 1st, consumers now receive enhanced
information and a guaranteed response time when they report unauthorized or fraudulent debit card transactions to their bank. Under the upgraded debit card code, debit card users will receive specific notification that the card issuer will investigate the unauthorized transaction(s) and a decision on reimbursement will come from that investigation. The card issuer will respond back to the cardholder no later than 10
business days after the unauthorized transaction is reported to the
card issuer. If not all funds will be reimbursed to the cardholder, then the card issuer will provide information it believes shows that the
cardholder contributed to the unauthorized use of the card. If a problem cannot be resolved between the cardholder and the bank, the bank will provide written information on how the customer can escalate the matter through the bank’s formal complaint-handling process. The changes are detailed in the “Canadian Code of Practice for Consumer Debit Card Services.”

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Senators Want G-Card Credit Limits Lowered

A bill has been introduced in the U.S. Senate to repeal or retract the change that was made in federal procurement with respect to government credit cards when the emergency supplemental was passed dealing with the hurricanes. In the aftermath of the Katrina disaster, the government raised the limit on its credit cards from $2,500 to $250,000. Sens. Byron Dorgan of North Dakota and Ron Wyden of Oregon, both Democrats, say the change was wholly inappropriate. The proposed legislation would reset the limit to $2,500 for a single, non-emergency purchase, $15,000 for emergency domestic purchases and $25,000 for emergency purchases overseas. Last month, Charles Grassley, the Senate Finance Committee Chairman and a Republican, sought to lower the limit to $50,000, unless approved by a supervisor.

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U.S. Bank Rolls-Out BSU Alumni VISA Cards

U.S. Bank has launched three affinity cards for the 35,000 alumni of Minnesota-based Bemidji State University. Cardholders will have access to three different U.S. Bank credit card products, including a card that earns reward points that can be redeemed for gift certificates, merchandise and travel rewards, and another that provides rewards designed especially for college students. Bemidji State University is a public university founded in 1919, with a current enrollment of more than 4,600 students from 37 states and 41 foreign countries. U.S. Bancorp has $204 billion in assets and is the 6th largest financial holding company in the United States.

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UK PO CARD

The U.K. Post Office and the Bank of Ireland this morning launched a MasterCard offering two interest rates. The new “two in one” “Post Office Credit Card” offers standard credit card functionality but also offers a installment loan-like facility with a discounted interest rate for larger purchases. Cardholders can transfer large purchases between GBP 500 and GBP 2000 into the special line with an interest rate of 6.8%. (The credit card feature generally carries a 14.9% interest rate.) The purchases transferred to the special line can be repaid over a period of 12 months. Cardholders can use the facility for up to two purchases at any one time subject to an aggregate limit of GBP 2,000 and have one month to transfer the purchase to the loan-like facility of the card. The U.K. Post Office has 14,600 branches across the country.

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CVS Licenses Acacia’s Card Fraud Patent

CVS Pharmacy has licensed Acacia Technologies patented credit card fraud protection technology. The patented technology generally relates to a computerized system for protecting retailers and consumers engaged in credit card, check card and debit transactions. The system includes an electronic card reader, and the generation and use of a transaction number, which specifically identifies each transaction processed within the system. As a result, the retailer does not necessarily have to print detailed information concerning the cardholder’s identity or account number on the customer’s receipt. The Acacia Technologies group develops, acquires, and licenses patented technologies.

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Charge-Offs Dip Slightly but Set to Rise

Charge-offs among credit card-backed securities again headed south during August for both prime and sub-prime portfolios. However, the improving ratio may be short-lived as a second wave of increased personal bankruptcy filings this year is under way. Personal bankruptcy petitions in August soared by nearly 24% from last year and were up about 15% from the prior month. For August, charge-offs in the “prime” asset-backed credit card securities market slipped one basis point to 5.97%. “Sub-prime” charge-offs fell by 61 basis points to 12.03%. One-year ago, “prime” charge-offs were 6.01% and “sub-prime” charge-offs stood at 15.58%. According to the “Fitch Credit Card Index,” “prime” delinquency (60+ days) rose to 2.61% in August, a very slight increase and well below monthly levels of the past ten years. “Sub-prime” delinquency (60+days) for August also increased slightly to 6.42%, but continues to hover at the lowest level in four years.

ABS CHARGE-OFF HISTORICAL
Month Prime Sub-Prime
Aug 04: 6.01% 15.58%
Jul 05: 5.98% 12.64%
Aug 05: 5.97% 12.03%
Source: Fitch Ratings

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Dexit Launches RFID Readers in Ottawa

Dexit announced it has begun a controlled launch of “Dexit
RFID” tag readers and terminals at four locations at Place Bell in
downtown Ottawa. Dexit has supplied approximately 1,500 RFID tags for
distribution to the more than 5,000 people who work in the Place Bell
office tower. Dexit launched its service in September 2003, initially in downtown Toronto. More than 50,000 consumers have registered for the Dexit service, which is currently available in more than 500 merchant locations.

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