Equifax has purchased the consumer credit files and certain customer contracts from CBC Companies for $95 million in cash. It is the largest such transaction to date. The purchased database includes customers in Ohio, Florida, West Virginia, South Dakota, North Dakota and Indiana. CBC is an independent credit reporting agency and has been a system affiliate of Equifax for more than 14 years. During August Equifax acquired Naviant, Inc. for $135 million. Naviant has an email database of more than 100 million unique permission-based addresses. (CF Library 8/16/02)
The growing consolidation in the consumer credit counseling industry continues to pick up speed. Yesterday, the Consumer Credit Counseling Services of Baton Rouge announced its merger with Houston-based Money Management International. CCCS of Baton Rouge has 15 offices throughout much of Louisiana and has operated for 38 years. The Baton Rouge merger is the sixth agency since 2000 to merge with MMI. Previous mergers include agencies in Texas, Arizona, New Mexico, Illinois, Pennsylvania and Virginia. MMI is now the largest full-service non-profit credit counseling organization in the USA with over 75 branch offices in nine states.
The OCC announced Tuesday that ACE Cash Express and Goleta National Bank have agreed to end their partnership of offering consumer “payday loans” by the end of this year. The OCC also fined ACE $250,000 and Goleta $75,000. The OCC said the penalties levied against ACE were mainly due to its failure to safeguard customer loan files and its pattern of excessive exceptions to Goleta policies and procedures. The OCC said Goleta failed to manage its relationship with ACE in a safe and sound manner, to violating the Equal Credit Opportunity Act and the Truth in Lending Act, as well as the privacy protections of the Gramm-Leach-Bliley Act. Earlier this month, a judge for the U.S. District Court for the Southern District of Indiana granted the motion to dismiss filed by ACE and Goleta National Bank in a lawsuit where the plaintiff alleged that GNB’s loans were made by ACE rather than GNB, and were therefore made in violation of Indiana law. The judge said that after reviewing the plaintiff’s complaint he found that GNB was the lender and that Section 85 of the National Bank Act, not Indiana law, regulated the permitted interest on GNB’s loan to the plaintiff. ACE has a total network of 1,191 check-cashing stores, consisting of 1,003 company-owned stores and 188 franchised stores in 35 states. (CF Library 10/3/02)
Capital One has taken a license from Ronald Katz Technology for customer service delivered through automated systems as well as the combination of automated systems and live agents. The license to Capital One Services Inc. covers services in the “Financial Services Call Processing” Field-Of-Use. These services, including customer service provided to consumer and business accounts, are delivered through automated systems as well as the combination of automated systems and live agents.
San Diego-based Cubic Corp. released its new “CUB132” contactless microchip, offering 32KB of memory, 16 times more than is currently available with the company’s “2KB GO CARD.” The “GO CARD” is currently in use by the Washington Metropolitan Transit Authority “SmarTrip” system. Cubic’s smart card technology also is in use by transit authorities in Chicago and on its way to being implemented in Minneapolis, Los Angeles and San Diego. The new Cubic chip represents the first availability of this kind of technology for smart card-based applications. Larger memory contactless cards are ideal for biometrics applications, such as digitized passport photos, fingerprints and medical information. The system also allows reloading from the Internet — providing a variety of security, industrial and government applications.
Gemplus and Ztango have signed a deal under which the Gemplus
Operation Center will facilitate distribution of Ztango’s ring tones,
screen savers and graphics to carriers utilizing Gemplus’ “OTA”
initialization services. As part of the new Gemplus/Ztango SIM-based media
offering, consumers will have access to more than 3,000 ring tone and
graphic media elements directly from their wireless devices.
Ztango customers include: AT&T Wireless, Motorola, Triton PCS, TeleCorp
PCS, West Virginia Wireless and Telecom Italia Mobile.
The suspense over MBNA’s third quarter earnings report ended yesterday without much fanfare. Due to the new FFIEC guidance, MBNA took a $167.2 million after-tax charge, pushing down profits. Third quarter net income came in at $398.0 million, a 16.8% decline from 3Q/01. For the first time, MBNA crossed the $100 billion milestone in outstandings, a $2.8 billion increase over the second quarter. During the third quarter MBNA signed up 86 new affinity and co-branded agreements, and renewed more than 250. MBNA added 4.3 million new cardholders and 3.5 million new accounts during the third quarter. Managed charge-offs for the third quarter were 4.84% compared to 5.09% in the second quarter. Delinquency (30+ days) stood at 4.79% for 3Q/02, compared to 4.90% one year ago. Volume was $41.7 billion, a 16% gain over last year. MBNA’s net interest margin has been shrinking this year, hitting 7.66% for the third quarter, despite a re-pricing campaign launched this summer. For complete details on MBNA’s third quarter performance visit CardData ([www.carddata.com]).
Capital One reported earnings for the third quarter of $258.8 million, versus earnings of $165.3 million one year ago. The company increased its allowance for loan losses by $358 million in the third quarter including $133 million due to the new FFIEC guidance. The managed net charge-off rate decreased to 4.96% for the third quarter compared with 4.98% for the second quarter. Cap One says 57 bps of the third quarter charge-off rate and 62 bps of the second quarter charge-off rate was due to the FFIEC change. The managed delinquency rate(30+ days) increased to 5.36% as of September 30th, compared with 4.54% as of June 30th, and 5.20% at September 30th. Cap One noted that charge-offs are expected to rise in the fourth quarter of this year and the early part of next year due to the seasoning of subprime assets added in the fourth quarter of 2001 and early 2002, as well as the slowing of loan growth. The company expects charge-offs to rise to the high-6 percent range in the first half of 2003 and then decline somewhat in the second half of 2003. Marketing expense for the third quarter was $185.8 million, down from $320.4 million in the second quarter. As a result, Capital One’s accounts declined to 48.2 million from 48.6 million at the end of the second quarter. For complete details on Cap One’s credit card performance during 3Q/02 visit CardData ([www.carddata.com]).
Dr Pepper/Seven Up, Inc. has signed an agreement to implement USA Technologies’ “e-Port” credit card payment services in vending machines throughout the U.S. The deal also offers “e-Port” to all bottlers that produce and/or distribute “Dr Pepper” and “7 Up” products, including some Coca-Cola and Pepsi bottlers. Historical data from hundreds of vending machines across the country using “e-Port” has already shown that the added consumer convenience of vending with the swipe of a credit or debit card has increased vending machine sales revenue by 15-20%, according to USA Technologies. USTT’s networking services offer consumers a variety of options when purchasing products from vending machines, from a credit card, debit card, and smart card, to employee identification numbers (ID), and hotel room key cards. In June, the company announced the number of Kodak vending machines using its “e-Port” card payment technology had grown to 400 nationwide. (CF Library 6/14/02)
Competition for the Washington (DC) Metropolitan Area Transit Authority smart card project is heating up. ERG Transit Systems and Northrop Grumman Information Technology have teamed to pursue transit opportunities throughout the USA. The two companies are currently bidding together on the contract for the WMATA Regional Customer Service Center. The WMATA project calls for the establishment and operation of a smart card customer service center and the clearing and settling of smart card transactions across all transit agencies in the Northern Virginia, Maryland and Washington DC areas. The WMATA project will start a new era of integrated transit in the greater Washington D.C. area, allowing passengers to use a single smart card to pay fares across every major transit system in the region. ERG built Hong Kong’s well-known “Octopus” system. “Octopus” is the largest smart card payment system for mass transit in the world, with some 8.6 million smart cards issued to date and over 7.2 million transactions processed each day. ERG is also engaged in the largest smart card contract in the United States to design, build, operate and maintain the “TransLink” fare payment system in the San Francisco Bay Area.
American Express has launched “Global Travel Shield”, a portfolio of comprehensive travel insurance products offered to consumers in 34 states. Global Travel Shield insurance products are available in four comprehensive packages of coverage, or travelers can customize their own packages by purchasing individual benefits.
BB&T has introduced a Web-based reporting service for merchant clients enabling real-time access to credit and debit card activity. Clients will be able to review transaction activity, monthly statements, deposit summary, batch summary, and historical data.