U.S. Bank Adds a Corporate Aviation Fuel Card

U.S. Bank is acquiring the corporate aviation fuel card business of Kansas-based Multi Service and absorbing 100 employees. Multi Service Corp. was established in 1978 to provide specialized credit-card services to the trucking industry, expanding to the aviation industry in 1980. U.S. Bank Corporate Payment Systems, a division of U.S. Bancorp, offers clients a full suite of solutions for commercial, fleet and B2B payment needs. U.S. Bank was the first to offer corporate bankcard, purchasing and relocation card programs, the first to offer a private-label fleet card and is one of the largest merchant acquirers in the world. Minneapolis-based U.S. Bancorp, with $195 billion in assets, is the 6th largest financial services holding company in the United States.

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U.K. Card ABS Remains Stable in Q4

Delinquencies (60+ days) for card-backed bonds in the U.K. remained stable in the fourth quarter ending the year at approximately 2.5%. Thirty day delinquency ended 2004 at 3.9%, 20 basis points below the third quarter. According to Fitch’s “Credit Card Movers & Shakers,” charge-offs ended the year at 4.5%, its third consecutive quarterly decline. Fitch expects charge-offs to drop to 4.2% by mid-year. Unlike the U.S. card ABS, the monthly payment rate has been dropping. During the fourth quarter the MPR declined to 16.7% compared to 17.7% for the third quarter.

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Wells Fargo ATMs Now 100% Web-Enabled

Wells Fargo reports that its entire network of over 6,200 ATMs is now Web-enabled. The “webATM(R)” machines feature six language screen options; customizable fast-cash amounts and MyATM(R) receipt preferences; access to 22 financial accounts; the highest level of security; and colorful, large font touch-screens that make it easier to navigate from screen to screen. In addition, all ATM locations have a Talking WebATM(R) machine, offering voice instructions for the visually impaired in both English and Spanish. Wells Fargo & Company is a diversified financial services company with $428 billion in assets, providing banking, insurance, investments, mortgage and consumer finance to more than 23 million customers. Wells Fargo Bank, N.A. is the only bank in the United States to receive the highest possible credit rating, “Aaa,” from Moody’s Investors Service.

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Egg Profits Rise 27% in the Fourth Quarter

Egg reports that operating profits for its UK business, including the “Egg VISA” card, rose 26.7% to $39 million. The issuer also noted that its new MasterCard product launched in June has racked up more than $267.5 million in card balances to date. During the fourth quarter, Egg opened 119,000 new credit card accounts in the UK. Total outstandings for Egg credit cards increased 18.7% to $6.9 billion. Egg says exit costs from France are within its projected provision. For complete details on Egg’s fourth quarter performance, visit CardData ([www.carddata.com][1]).

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

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EGG 4Q/04

Egg reports that operating profits for its UK business, including the “Egg VISA” card, rose 26.7% to GBP20.4 million. The issuer also noted that its new MasterCard product launched in June has racked up more than GBP140 million in card balances to date. During the fourth quarter, Egg opened 119,000 new credit card accounts in the UK. Total outstandings for Egg credit cards increased 18.7% to GBP3.6 billion. Egg says exit costs from France are within its projected provision. For complete details on Egg’s fourth quarter performance, visit CardData (www.carddata.com).

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Cap One Partners with Books From The Heart

The Heart of America Foundation, through its “Books From The Heart” program, and Capital One have formed a three-year partnership to provide access to reading material for about 200,000 children through its Literacy Celebration. Thirty-seven percent of American fourth-graders read at or below basic levels and are functionally illiterate, according to the National Assessment of Educational Progress. Literacy Celebration will take place from March 1st through March 16th in several communities throughout the country. Books From The Heart(TM) is a national program of The Heart of America Foundation(R), a nonprofit humanitarian network located in Washington, D.C. This is the fifth year Capital One has been involved with Literacy Celebration and the third year it has joined with Heart of America. Over the past four years, Capital One has been responsible for placing nearly 350,000 books in the hands of almost 150,000 children. In addition, Capital One employees have spent more than 8,000 hours reading and distributing books to children. Headquartered in McLean, Virginia, Capital One, a Fortune 500 company, is one of the largest providers of MasterCard and Visa credit cards in the world.

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Experian-Gallup Personal Credit Index Launched

Experian and The Gallup Organization have teamed to launch the monthly “Personal Credit Index.” The new metric will monitor consumers’ perceptions of their credit status to include four key areas related to credit: level of debt, monthly payment burden, credit rating and debt extension capability. The baseline “PCI” score is 100 and suggests that people are considerably more optimistic about their future credit situation than they are about their current credit situation. The current “PCI” shows an index of 44 among consumers with annual incomes under $40,000 a year, 107 for consumers with incomes from $40,000 to less than $75,000 a year, and 171 for consumers with annual incomes of $75,000 or more. Experian and Gallup also found that three in four consumers have a credit card and 69% report having a fixed interest rate.

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OPC Signs the Oregon Department of Revenue

The Oregon Department of Revenue has signed a credit card acceptance deal with Official Payments Corp., a wholly owned subsidiary of Tier Technologies, Inc. Beginning in early 2005, Oregon taxpayers may make personal income tax payments using a Visa(R), Discover(R) or MasterCard(R) via the Internet or through a voice-activated telephone system. Official Payments provides this service at no cost to the State of Oregon but charges users a convenience fee for the service. Taxpayers using debit or credit cards with bonus rewards programs may, depending on their card’s program, earn reward points, airline frequent flyer miles or cash back for paying their taxes and fees. Official Payments provides electronic payment services for the Internal Revenue Service, 25 states, the District of Columbia and over 1,600 local government clients nationwide. Tier is a leading provider of transaction processing and packaged software and systems integration services for public sector clients.

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ABS Metrics Improve in Jan, Except Yield

Delinquency (60+ days) among card-backed securities dropped again in January to 2.90% and has been down year-over-year for five consecutive months. The monthly payment rate continues to rise, hitting 17.70% in January, a 139 basis point increase over one year ago. Prime charge-offs also improved, dropping 4 bps to 6.25%. Prime charge-offs are now 41 bps below last year. According to the “Fitch Credit Card Index,” yield eroded by 17 bps to 16.64% for January, now six bps below one year ago. Sub-prime credit card ABS also improved in January as charge-offs decreased by 48 bps to 14.46%, well below last year’s metric. Sub-prime delinquency also declined to 7.82%, the lowest level since October 2001.

ABS CHARGE-OFF HISTORICAL
Month Prime Sub-Prime
Jan 04: 6.66% 17.03%
Dec 04: 6.29% 14.94%
Jan 05: 6.25% 14.46%
Source: Fitch Ratings

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Federated is Mulling a Card Exit

In a follow-up press conference yesterday, Federated indicated it may unload its credit card portfolio later this year, including the soon-to-be acquired May card portfolio. The potential sale could include as much as $5.5 billion in private label and bank credit card loans. As reported in Monday’s CardFlash, Federated Department Stores and The May Department Stores Company are merging. Both portfolios have experienced a steady erosion in outstandings since 2000. Discounting the Marshall Field acquisition by May, the Federated and May store credit card businesses have fallen nearly 14% and 25%, respectively, compared to 2000. It is expected that Citi, GE and HSBC would consider the acquisition. Citi Commerce, GECF and HSBC now account for over 90% of total third-party issuer receivables in the USA. GE recently expanded its card relationship with Wal-Mart, launching the “Wal-Mart Discover” card. (CF Library 1/14/05; 1/21/05)

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Hypercom Places a Major Order for OTI Readers

Hypercom has ordered its first commercial quantities of New Jersey-based On Track Innovations’ contactless reader solutions. OTI’s system is compliant with MasterCard’s “PayPass” and American Express’ “ExpressPay.” The OTI readers will be integrated into Hypercom’s “Optimum T4100” and “L4100” card payment terminals. Hypercom has already integrated into its solution set OTI’s contactless “Saturn 5000” reader, which offers a plug-and-play retro-fit option to merchants already using Hypercom technology at the point-of-transaction. The combined solution also allows issuers to provide consumers with highly secure contactless cards and key fobs with smart stickers and custom designs, such as new specially equipped watches that feature transaction capabilities.

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