Gross Dollar Volume (GDV) for U.S. Visa and MasterCard branded credit cards is rebounding after six painful years. In the third quarter GDV rose 9.2% year-on-year, compared to 5.8% one-year ago. The September 15, 2008 Lehman bankruptcy and subsequent credit crisis of 2008 and 2009 drove GDV down by more than 16% for two quarters. With the exception of the historically slow first quarter this year, bank credit card GDV has been heading upward, hitting 7.8% in the second quarter, according to CardData.
Fiserv announced lenders and servicers can use its “LoanComplete” suite of solutions from Fiserv to help them maintain compliance with the Consumer Financial Protection Bureau’s (CFPB) mortgage servicing final rules that go into effect on January 10, 2014, the Real Estate Settlement Procedures Act (Regulation X) and the Truth in Lending Act (Regulation Z). The “LoanComplete” life-of-loan suite helps lenders and servicers comply with complex government regulations while simultaneously reducing their loan-processing time and exposure by combining standardized workflow processing with enterprise content management and customized data analytics. Regulation X addresses servicers’ obligations to correct errors asserted by consumers who have home loans, comply with their information requests and provide protections from force-placed insurance. The rule also requires servicers to provide information about mortgage loss mitigation options to delinquent borrowers; to establish policies and procedures for providing them with continuity of contact with personnel capable of performing certain functions; and to evaluate borrowers’ applications for available loss mitigation options.
Joseph J. Plumeri is joining the Board of Directors of First Data, a KKR portfolio company. Having served 12 years as Willis Group chairman and CEO and as its non-executive chairman through July 2013, Plumeri strengthened Willis’ position as one of the world’s leading insurance brokers through industry-sector-leading organic growth and operating margins, strategic expansion, and a return to public ownership in 2001. Prior to joining Willis, Plumeri had a 32-year career at Citigroup and its predecessor companies. As CEO of Citibank North America, he led the integration of the consumer businesses at Citicorp and Travelers Group. He also served as chairman and CEO of Travelers Primerica Financial Services, vice chairman of the Travelers Group, and president and managing partner of Shearson Lehman Brothers.
Bank of America announced that it and Barclays Bank PLC have entered into an agreement with Equity Residential and Lehman Brothers Holdings Inc. pursuant to which Bank of America and Barclays will sell their remaining 26.5 percent interest in Archstone, a privately-held owner, operator and developer of multifamily apartment properties, for a purchase price of…
Lehman Brothers Holdings Inc. announced today that it has exercised its right of first offer to purchase the remaining stake in Archstone held by affiliates of Bank of America and Barclays Capital (“the Banks”), which will give Lehman full ownership of Archstone. This transaction follows Lehman’s purchase in January 2012 of a 26.5% interest previously…
J.P. Morgan announced that Jeff Urwin, Head of Global Investment Banking Coverage, Capital Markets and Mergers & Acquisitions, will take on the additional role of CEO of Asia Pacific, based in Hong Kong. Urwin will be responsible for overseeing all of J.P. Morgan’s strategic activities in the region, along with his current global banking responsibilities.…
Having completed its merger with Bonfire Productions, C$ cMoney has named a new executive management team. With this, Lawrence Krasner is to serve as president and CEO. A veteran of the financial services industry, Krasner brings with him over 23 years’ experience to the company. In his new role, he will oversee the strategic direction of C$ cMoney, working in tandem with the Board of Directors and acting as the official spokesperson. Krasner managed the development of a multi-billion dollar capital markets integration program for a global investment bankâs private wealth management group in his previous role with CSC Consulting. He also served as senior vp and group head of an internal projects team with Lehman Brothers, managing a portfolio of global strategic initiatives.
Increasingly positive media coverage of consumer spending contributed to a significant rise in the Dow Jones Economic Sentiment Indicator (ESI) from 36.9 in October to 38.3 in November. The ESI has risen 11 out of 12 months since its low of 22.2 in November 2008, confirming the consensus among economists the U.S. recession ended sometime early in the summer. Consumer confidence is an important factor that is improving as the holiday season approaches. In November 2008 gloomy shopping-related articles outweighed positive ones by three to one, helping drive the ESI down to its lowest ever level of 22.2. This November the balance is much more equal, indicating a healthier economic outlook and pushing the indicator back to levels not seen since the collapse of Lehman Brothers.
One year after the collapse of Lehman Brothers, Merrill Lynch, the DJIA
504 point drop and the resulting “Credit Crunch,” American consumers
remain cautious on spending, shifting to more value. For example a new
survey reveals that one year ago the greatest number of consumers said
their top priority expenses were vacations (25%) and dining out (24%).
Today, only seven percent named vacations as a high priority and dining
was named as a high priority for only eight percent.
The findings come from the new monthly “American Express Spending &
Saving Tracker” survey which also finds 60% of consumers intend to spend
about the same or more in the next 30 days, (compared to the last 30
days), but 40% plan to spend less. Among the 40% who said they would
spend less in the next 30 days, the top three reasons were “trying to
save money,” “reducing debt,” and that they “have the money but feel now
is not the time to spend.” The survey also found that consumersâ intend
to strengthen their household balance sheet. When asked what they would
do with $500 of found money, one-third of consumers said they would pay
off their regular monthly bills. One-in-four said they would apply it to
pay off credit card debt or save it. The new AmEx survey was conducted
by Echo Research.
Bank of America has tapped Robert Scully, previously with Morgan Stanley, to serve as on the Board of Directors.
Scully, 59, served as a member of the office of the chairman of Morgan
Stanley focusing on the firm’s key clients.
While co-president at Morgan Stanley, Scully was responsible for asset
management, the Discover card business and merchant banking activities.
Prior to that, he served as chairman of global capital markets and was
vice chairman of investment banking where he was responsible for talent
development, senior client relationships and strategic initiatives.
Before joining Morgan Stanley in 1996, Scully served as a managing
director at Lehman Brothers and at Salomon Brothers.
He received a bachelor’s degree from Princeton University in 1972 and an
MBA from Harvard Business School in 1977.
Consumer revolving credit, mostly credit card debt, has been declining at a much faster pace in 2009 than previously reported and continued its rapid downward spiral in June. Posting its tenth consecutive monthly decline, U.S. consumer revolving credit dipped to $917.0 billion in June. Since peaking at a revised $973.5 billion in the third quarter of last year, Americans have chopped-off about $56.5 billion in revolving credit to-date. According to new and revised data released by the Federal Reserve, revolving credit declined at an annual rate of 6.8% in June, following a revised 6.3% decline in May and an 11.7% drop in April. In May revolving credit declined to a revised $922.3 billion and to a revised $927.9 billion in April. February posted the largest contraction over the past eight months, dropping nearly $13 billion, declining at an annual rate of nearly 14%. Bank credit card debt (excluding store and gas credit cards) at the end of the first quarter was about $780 billion or roughly 85% of total revolving credit, according to CardData (www.carddata.com). Store and gas credit cards had about $105 billion in outstandings at year-end 2008. At the end of June, Americans were $2503 billion in debt, excluding home mortgages.
REVOLVING CREDIT HISTORICAL ($billions)
Jun 09 May 09 Apr 09 Mar 09 Feb 09 Jan 09
GRWTH: -6.8% -6.3 -11.7 -8.9 -13.9 -0.7
$OWED: $917.0 922.3 927.9 936.2 948.4 961.0
Source: Federal Reserve; revised figures as of 8/7/09;
For complete historical data, visit CardData (www.carddata.com)
The government’s $700 billion bailout plan, which has thus far proved
to be little more than a band aid on a ruptured artery caused by the
failure of Lehman Brothers, continues to ignore the core issue of
housing stability. A new report by John Burns Real Estate Consulting
underscores the need for stability in the banking system to produce
stability in the housing market. The report calls for continuing to
insure deposits up to $250,000 and unlimited amounts in payroll accounts
and to close all poorly managed and under-capitalized banks ASAP. Burns
suggests temporarily providing a down payment match to all home buyers
at a cost of approximately $40 billion and temporarily doubling the
mortgage interest rate deductions for all homeowners at a cost of $188
billion per year. Also, allow companies to utilize their current losses
to recapture taxes paid over the last 4 years so they can keep enough
cash in the bank to meet payroll and create government-backed
initiatives to help banks make good loans to employers.