Credit Industry Almanac 2005 Released

Ireland-based Research And Markets has released its “Banking, Mortgages & Credit Industry Almanac 2005”. In addition, a large number of related services and technologies have a major influence on the lending and credit business. These services include e-commerce, credit risk analysis, call centers and information technologies. It contains thousands of contacts for business and industry leaders, industry associations, Internet sites and other resources. This book also includes statistical tables, an industry glossary and thorough indexes.

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Triton Finds its Oldest ATM in Indiana

King Oil, owner of Mara-Mart convenience stores in Indiana, has won Triton Systems’ “10th anniversary” contest to find the ATM manufacturer’s oldest retail machine still in operation with the original owner. IFS Cash Processing Systems, the distributor, says the “Triton 9500” machine was the first one it sold. King Oil and the independent sales distributor who sold the ATM will receive new “Triton 9100” models. Triton has more than 118,000 installations in 17 countries worldwide.

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Credit Union Business Cards Get a Rewards Option

Credit union issuers now have the option of offering their business credit and debit cardholders a business-focused rewards program. Dallas-based TNB Card Services has partnered with NH-based RewardsNOW to create the option for TNB’s 400 credit union clients. One option in the RewardsNOW business program allows points earned by any of a business’ cardholders to accrue to the business owner’s account, aggregating the points. This enables the business owner to use rewards for employee recognition, customer incentives, or to make purchases for the business. Travel rewards, typically the most popular, are earned as points applicable toward any airline, cruise line, hotel, or car rental company, entirely free of blackout dates, advance purchase requirements, or seat or other limitations.

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Suncoast Schools FCU Joins the CO-OP Network

Tampa-based Suncoast Schools FCU has joined the CO-OP Network with its 175 ATMs boosting CO-OP Network’s Florida fleet of surcharge-free ATMs to 1,568. Suncoast Schools FCU has 37 branches along Florida’s west coast to serve its 353,000 members. CO-OP Network (www.co-opnetwork.org), established in 1981 and located in Ontario, Calif., is wholly-owned by its credit union shareholders and provides volume discounts on products and services that include risk management as well as debit and deposit access.

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Deluxe CEO/Chairman to Retire Next Year

MN-based Deluxe Corporation confirms that its CEO and Chairman, Lawrence Mosner, will retire in 2005. Mosner has held a number of key leadership positions since joining Deluxe in 1995. He assumed his current role of chairman and CEO in 2000 following the spin-off of eFunds Corporation, and is only the seventh CEO in Deluxe’s nearly 90-year history. Deluxe Corporation, through its industry-leading businesses and brands, helps financial institutions and small businesses better manage, promote, and grow their businesses.

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Choice Hotels Names AmEx Card Exec to its Board

Choice Hotels International has named Gordon Smith, President of the U.S. Consumer Card Services Group of American Express TRS, to its Board of Directors. He holds overall responsibility for the company’s consumer card businesses in the United States, including charge, credit and co-brand cards, as well as strategic relationship services. His other previous positions include serving as Senior Vice President in charge of the American Express Service Center in Phoenix, Senior Vice President of Operations and Reengineering for the Latin America and Caribbean region, as well as senior positions in the U. S. Credit and Fraud operations, at Amex Life Insurance Company and in the international card and Travelers Cheque businesses.

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Online Shopping to Peak Tomorrow

Tomorrow, December 14th, is projected to be the biggest online shopping day of 2004. CyberSource Corporation says the estimate is based on analysis of CyberSource transaction volume, shipping days remaining before December 25th, and merchant incentives to encourage earlier ordering. Furthermore, Mondays and Tuesdays are typically the biggest online shopping days throughout the year. The peak shopping day has occurred earlier during each of the past two years: in 2002 it was December 17th, in 2003 it was December 15th. CyberSource believes that is mostly due to store incentives to order earlier — online merchants have learned their lesson in prior years about unmanageable shipping volume the last few days before Christmas.

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Charge-Offs and Delinquency Slip Up-Stay Low

Charge-offs and delinquency, among credit card-backed securities, edged upward in October, compared to September but remain comfortably lower than one-year ago. Meanwhile, monthly payment rates tapered off a bit as the yield jumped 100 basis points to 18.00%, compared to the previous month. According to Standard & Poor’s “Credit Card Quality Index,” charge-offs rose to 6.4% in October, compared to 5.9% in September, and 6.9% on October 2003. Delinquency increased to 4.5% during October, compared to 4.4% in September, and 5.2% one-year ago. The monthly payment rate slipped to 17.1% in October, compared to 17.3% in September, and 16.9% for October 2003. Yield rose to 18.0% in October, compared to 17.0% in September, and 17.6% one-year ago.

CARD ABS PERFORMANCE
Oct 01 Oct 02 Oct 03 Oct 04
Delinquency 5.2% 5.5% 5.2% 4.5%
Charge-Offs 6.8% 6.9% 6.9% 6.4%
Payment Rate 16.2% 16.3% 16.9% 17.1%
Yield 19.9% 18.7% 17.6% 18.0%
Source: Standard & Poor’s Credit Card Quality Index

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Rising Debt May Create Long-Term Problems

Total borrowing by British households continues to grow at
annual rate of 15%, raising household debt to 140% of aggregate income. The Bank of England says this is above the levels in the United States and most large European countries. According to the latest “Financial Stability Report,” unsecured borrowing by individuals, especially credit cards, may create “heightened long-term vulnerabilities.” The report found that 40% of mortgage holders agreed with the statement, “My house value has risen so much that I do not worry about other debts I may have.” The BOE cautioned that financing difficulties would be exacerbated if any fall in house prices were accompanied by a wider economic slowdown. Looking forward, the BOE says banks face a number of risk management challenges. One is managing the transition to the new personal insolvency law regime, which could have a long-lasting effect if it changes debtor behavior and thus the sensitivity of write-offs to adverse macroeconomic shocks. Another is managing the implications of the strong growth in unsecured lending over the past five years, especially where this has occurred through lending to new customers for whom the bank has no past current account information with which to supplement a credit assessment. Lending to customers with multiple borrowing relationships may also pose a challenge when the bank does not have complete information about the evolution of a customer ‘s total indebtedness over time.

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