May U.S. consumer revolving credit card debt remains weak growing at an annual rate of +3.0%, compared to a revised +1.7%% in April and a revised +13.2% in March. Overall consumer credit increased at a seasonally adjusted annual rate of +6.2% in May. Non-revolving credit increased at an annual rate of +7.3%. Total revolving credit…
January consumer revolving credit card debt increased at an annual rate of -1.3%, compared to +7.0% in December and +8.4% in November. Overall consumer credit increased at a seasonally adjusted annual rate of +3.6%. Non-revolving credit increased at an annual rate of +5.4%. Total revolving credit for January posted at $935.3 billion, compared to a…
Japan’s NTT DoCoMo and its eight regional subsidiaries are launching a mobile credit payment service. The “DCMX” consumer credit service will use “iD,” DoCoMo’s brand and platform for mobile credit cards. Users of Osaifu-Keitai phones with wallet functions will be able to choose from two plans to make highly secure purchases from small to large amounts using their phones as DoCoMo-issued credit cards. The “DCMX mini” will be launched on April 28th, and will offer a monthly credit line of 10,000 yen. Credit lines from 200,000 yen as well as cash advances will be available under a separate service, also called “DCMX,” which will offer several repayment options. Payments made via “DCMX” will earn points that can be redeemed for discounts on products and services from DoCoMo and other participating establishments. DoCoMo also plans to offer a premium “DCMX GOLD” mobile credit-card service in the future.
Japan’s NTT DoCoMo and its eight regional subsidiaries are launching a mobile credit payment service. The “DCMX” consumer credit service will use “iD,” DoCoMo’s brand and platform for mobile credit cards. Users of Osaifu-Keitai phones with wallet functions will be able to choose from two plans to make highly secure purchases from small to large amounts using their phones as DoCoMo-issued credit cards. The “DCMX mini” will be launched on April 28th, and will offer a monthly credit line of about $85. Credit lines from $1700 as well as cash advances will be available under a separate service, also called “DCMX,” which will offer several repayment options. Payments made via “DCMX” will earn points that can be redeemed for discounts on products and services from DoCoMo and other participating establishments. DoCoMo also plans to offer a premium “DCMX GOLD” mobile credit-card service in the future.
SLMsoft.com, Inc., a leading global provider of electronic financial transaction solutions for the e-commerce market, announced that Shenzhen Development Bank has selected SLMsoft.com’s credit card issuing and management, and ATM network management solutions.
“We’re very pleased to have Shenzhen Development Bank as a new client,” said Chairman and CEO Govin Misir. “Building on our reputation as an established provider of networking, card system and electronic banking technology within the region, this new client was referred to us by an existing customer, the Bank of China. We expect to continue expanding our business into the Asian market as regional banks further adopt the type of new electronic and Internet banking solutions currently being established as standards in North America.”
Under the agreement, SLMsoft.com will provide its ESP-Link/FTS Financial Transaction Solution for ATM network management and the ESP-Link/CCS credit card issuing and management solution to the Bank as it modernizes to meet the growing demand for customer-focused services.
“We selected SLMsoft.com for our technology partner because, in our opinion, the Company’s technology offers us the greatest ease of installation and broadest range of applications as we and China in general move toward a fully modernized, customer-focused banking system,” said Lin Zhou, President of Shenzhen Development Bank. “We recognize customer services as key to driving revenue growth in China. The ESP-Link ATM network management and credit card issuing and management solutions will allow us to issue our own revolving-credit credit cards and acquire transactions from local credit, debit and virtual cards. In addition, SLMsoft.com’s solutions will interface with the National Bank Card Center, along with Shenzhen Net, Shanghai Net and Guangdong Net, all of which are national and local Golden Card Networks connecting regional banks’ branches with larger central banks. Important to our ongoing expansion toward the ability to offer truly international services, the ESP-Link/FTS solution will provide us with connectivity to VISA International.”
SLMsoft.com’s technology will enable the Bank to provide its customers with service 24 hours a day, 7 days a week – a marked improvement from what is currently used at Shenzhen Development Bank. The Bank’s present system shuts down daily from midnight to 6 am. Bank President Lin Zhou concluded by commenting that, “SLMsoft.com’s solutions are flexible and modular, allowing us to add new functionalities with ease. We intend to continue our strategy of increasing the use of technological solutions to attract more local and international clientele.”
About Shenzhen Development Bank
The Shenzhen Development Bank is the first independent, public-owned, full-service bank in China, unlike most banks that are Government State-owned. Its shares are traded on the Shenzhen Stock Exchange. Shenzhen Development Bank has gained a reputation for outstanding customer service and is very small-business friendly. The Shenzhen Development Bank is recognized as one of the fastest growing banks in China and continues to introduce leading-edge products and services to satisfy a new generation of clients. As of 1999 Shenzhen Development Bank has over 50 branches in 12 cities and total assets of over US$5 billion.
About SLMsoft.com, Inc.
SLMsoft.com is a leading provider of end-to-end open system e-commerce solutions to financial institutions, governments and healthcare organizations. Founded in 1986, SLMsoft.com delivers the world’s broadest array of electronic transaction management solutions to customers in 53 countries around the globe. SLMsoft.com provides all the software, services and infrastructure businesses need to offer complete B2B and B2C e-commerce services to their customers. The Company is a single-source provider of in-house and outsourced solutions through its EC-street(TM) network of e-commerce products and services. The EC-street network includes Internet banking, ATM and kiosk networks and services, core banking systems, check imaging, telephone banking, electronic bill presentment and bill payment, point-of-sale and point-of- service management, debit and credit card solutions, web site design and hosting, and e-financial portal development. EC-street’s real-time connectivity is facilitated through SLMsoft.com’s ESP-Link(TM) middleware. The Company has over 620 employees in 22 offices worldwide.
First Union signed a definitive merger agreement Friday with The Money Store Inc. to create the nation’s number one coast-to-coast provider of home equity loans. The combined company will also be the nation’s top provider of SBA loans and the number three provider of student loans. However as reported last week in CardFlash First Union is pulling in the reins on its national credit card business.
First Union Corporation has signed a definitive merger agreement with The Money Store Inc. to create the nation’s number one coast-to-coast provider of home equity loans. The combined company will also be the nation’s top provider of SBA loans and the number three provider of student loans.
Under the terms of the agreement, First Union will pay $34 per share in First Union common stock for each share of The Money Store’s common stock. First Union also will issue shares of First Union common stock in exchange for The Money Store’s outstanding convertible preferred stock as described below. The total purchase price is approximately $2.1 billion.
In connection with the transaction, First Union expects to repurchase a number of its outstanding shares of common stock equal to the number of such shares to be issued in the merger, which First Union currently estimates will be approximately 41 million shares based on First Union’s current market price.
The transaction will be accounted for as a purchase and is expected to be completed in the third quarter of 1998, subject to approval by The Money Store’s shareholders and regulatory agencies and other conditions of closing. The transaction is expected to be immediately accretive to First Union’s earnings.
“We are excited by the opportunity this partnership presents for us to fill an important gap in meeting the credit needs of a broader range of customers with expanded and very complementary products,” said John Georgius, president of First Union Corporation. “The combination with The Money Store fits perfectly with our retail strategy of meeting the needs of all customers when, where and how they want.”
The Money Store will retain its 31-year-old name, a leading brand in the financial services industry, as well as its management. It will operate as a separate delivery channel within the First Union Consumer Group, which includes the mortgage business, home equity bank, electronic and telephone banking, credit card, consumer credit and automobile finance businesses. The Money Store’s Chief Executive Officer Marc Turtletaub, who helped build the company with his father, founder Alan Turtletaub, will continue to lead The Money Store.
“First Union and The Money Store are ideal partners,” Marc Turtletaub said. “We decided to combine with First Union only after a thorough examination of all strategic alternatives. That process clearly showed that these two companies share the same values of community outreach and commitment to superior service, convenience and product range for our customers.”
The Money Store expands First Union’s ability to provide credit to homeowners who may not otherwise qualify for bank credit. Home equity products can be an excellent strategy to allow consolidation of high-interest, revolving-credit debt into lower-interest loans, improving the borrower’s monthly cash flow and often offering a tax deduction. Since 1994, First Union has also been providing home equity credit for these homeowners, and securitizing the loans through its Capital Markets Group. Securitization frees up additional capital to be reinvested in First Union’s communities.
“First Union is taking a giant leap forward in meeting the need for all American families to obtain credit and reduce their reliance on higher- interest revolving credit,” said Jack Antonini, head of the First Union Consumer Group. “First Union can now provide more customers with the money they need and a range of options that can become part of their long-term credit-improvement strategies – and keep them First Union customers for life.”
First Union is also intensifying its commitment to low- and moderate- income communities. The First Union Special Home Improvement Loan will be extended nationwide through The Money Store’s network. This product offers low rates, no origination fee and flexible guidelines that make it easier for a low- to moderate-income borrower to qualify for a loan. The borrower will also earn a 2 percent rebate of the annual interest expense if payments are made on time.
In addition, in New Jersey, Pennsylvania and Delaware, First Union will increase its recently announced $13 billion Community Reinvestment Plan by $1 billion, ensuring additional credit to low- and moderate-income neighborhoods and small businesses.
Because First Union and The Money Store have significant complementary strengths with very little overlap in operations, no office closings are planned. First Union currently expects to take a one-time merger restructuring charge of approximately $20 million in the third quarter of 1998.
With headquarters in Union, N.J., and a significant corporate presence in Sacramento, Cal., The Money Store has 4,800 employees doing business in all 50 states through 172 branches and call centers responding primarily to individual consumers through the well-known 1-800-LOAN-Yes(R) line.
First Union Home Equity Bank’s focus is primarily business-to-business, working with brokers and home improvement contractors through its 120 branches in 34 states. First Union’s student loan business, focused on the individual student, fits well with The Money Store’s college-based approach with primarily government-secured student loans made through admission offices.
First Union Direct’s 24-hour, 7-day a week sales and service, complements The Money Store’s 1-800-LOAN-YES(R) in providing consumers nationwide with choice in when, where and how to do their financial business at 1-800-ASK-FUNB.
The transaction is intended to be generally tax free to the holders of The Money Store common stock and The Money Store convertible preferred stock. Each share of The Money Store convertible preferred stock (NYSE MON PrA) will be exchanged for First Union common stock having a value of $34 times .92, subject to the approval of the holders of such shares. If such holders do not approve the exchange, they will receive shares of a new series of First Union convertible preferred stock containing substantially similar terms as the The Money Store convertible preferred stock, as adjusted to reflect the merger.
Also, in connection with the execution of the merger agreement, First Union was granted an option to purchase, under certain circumstances, up to 24.9 percent of the outstanding shares of The Money Store common stock.
First Union Corporation is a leading provider of financial services to more than 12 million retail and commercial customers throughout the East Coast and the nation. At Dec. 31, 1997, First Union had assets of $157 billion. First Union’s pending merger with CoreStates Financial Corp (NYSE CFL), with assets of $48.5 billion as of Dec. 31, 1997, was approved by shareholders of both companies on Feb. 27, 1998, and is currently pending regulatory approval. First Union operates full-service banking offices in Connecticut, Delaware, Florida, Georgia, Maryland, New Jersey, New York, North Carolina, Pennsylvania, South Carolina, Tennessee, Maryland and Washington, D.C.