APRIL CB INDEX

The Japan leading index decreased 0.2% and the coincident index
increased 0.3% for the month of April 2008 according to the Conference
Board. The leading index remained unchanged over the past two months
and, since October 2007, fell at about a -1.1% rate. Meanwhile, the
coincident index increased in April with large downward revisions to
current economic conditions from October, having since fell at about a
-0.7% rate thanks to declining manufacturing sales. Overall, the leading
index has declined for eight of the last twelve months and now stands
5.2% below its December 2006 level while real GDP growth picked up to a
3.3% annual rate in the 1Q08, up from the 1.9% average annual rate in 2H/07.

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Supreme Court Knocks Down Perfect 10 Lawsuit

The Supreme Court this week announced it will stand on its decision regarding the credit card Web case filed by Perfect 10, a men’s magazine, against Visa, First Data and MasterCard for alleged third-party liability for enabling consumers to buy infringing images online. The Ninth Circuit U.S. Court of Appeals in San Francisco ruled 2 to 1 against Perfect 10 last July and the case was appealed to the Supreme Court in December, citing the magazine’s failure to prove its argument that the credit card companies made copyright infringement profitable and therefore more widespread than it would have been as a result of the payment system.

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OLYMPIC SMART CARDS

The Bank of China and the China Everbright Bank are now offering special “Visa Olympic”-edition credit cards, while China Mobile is marketing a gift box containing six prepaid telephone cards for the “2008 Beijing Olympic Games.” The smart cards are supplied by Germany’s Giesecke & Devrient. The Bank of China has issued more than 800,000 G&D smart Visa credit cards so far. The China Everbright Bank has issued over 200,000 “VISA Olympic” credit cards. China Mobile, the world’s largest mobile network operator, has brought out a gift box containing six prepaid telephone cards in a circular arrangement to mark the “2008 Olympic Games.” China Mobile has issued four sets of commemorative cards for the “Games.” G&D provides smart card based solutions for telecommunications, electronic payment, healthcare, ID, transportation, and IT security).

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Credit Card Interchange Fee Bill Introduced

Senate Majority Whip Richard Durbin, (D-IL) introduced legislation that would require credit card systems possessing “substantial market power” to negotiate with merchants to reach a voluntary agreement on credit card terms and conditions. The “Credit Card Fair Fee Act of 2008” is a companion measure to “H.R. 5546,” also named the “Credit Card Fair Fee Act of 2008,” introduced by House Judiciary Committee Chairman John Conyers, (D-MI) in March. If an agreement could be reached, both sides would be required to submit their final offers to binding arbitration by a three-judge panel appointed by the DOJ and FTC. These judges would investigate the fees, terms, and overall market conditions for electronic payment systems. The judges would then order a mandatory settlement conference, and if the settlement conference failed to result in an agreement between the retailers and providers, the judges would conduct a hearing where each side would present their final offer of fees and terms.

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Consumer Debt Conference Slated for Jun 19

Fordham Law School will host “New York City Consumer Debt Conference: A Blueprint for Reform.” The goal of the Conference is to identify concrete and achievable reforms and strategies that can be help low-income New Yorkers stabilize and improve their financial health, build wealth, enjoy the benefits of a fair financial services market, and be better protected against deceptive and abusive practices. NYC’s Civil Court alone has experienced exponential growth in consumer debt cases, which have become a pressing concern for low- and moderate-income families in the city and across the country. This court now processes more consumer debt cases per year than any other type of filing, and more than 500,000 since 2006.

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Personal Card Data Goes on the Cheap Abroad

New research has surfaced revealing that basic credit card information sold for fraud purposes is now commonly sold through the chat rooms in China, Vietnam and Indonesia for around $1 per card. Three to four years ago such information sold for an average of $5 to $7 per card in chat rooms in Eastern Europe. Affinion’s CardCops division says increased American tourism in the Indochina region and the high credit limits on U.S.-issued cards, have driven the increase. Upgrades to more privileged information, such as birth records, mother’s maiden names, social security numbers and mortgage information, will cost the ID thief closer to $10 per card. CardCops says tourists most often fall victim to restaurant workers, hotel employees and taxicabs while on their vacation, only 1% of these thefts are ever investigated, and a minuscule 0.5% of the thieves are ever prosecuted as a result of jurisdictional issues, resources, and the facility of perpetrators to easily erase computer/network data. CardCops notes that thieves are now collecting personal data on Websites such as Ancestry.com and Zillow.com. Additionally, the global identity theft marketplace has advanced so that buyers of personal information can pick and choose identities from victims in specific countries, and with specific ranges of net worth.

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ClearCommerce Selects Certicom’s Security Builder

ClearCommerce has selected VA-based Certicom’s “Security Builder Secure Sockets” layer solution for card-not present payment processing. Security Builder SSL offers a single application program interface (API) for 30 platforms and is optimized for a variety of environments including mobile devices and applications. It is also part of the Certicom Security Architecture, a comprehensive, cross-platform solution designed to allow developers to quickly and cost-effectively embed security into applications and across multiple families and generations of devices. Security Builder SSL is optimized to provide secure communications between popular browsers on handhelds and mission-critical applications such as e-mail, e-commerce, instant messaging and virtual private network (VPN) connectivity. Certicom manages and protects the value of content, applications and devices with government-approved security.

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MPC Says V/MC Failed to Explain Fees to Congress

The Merchants Payments Coalition said Durbin’s Senate legislation will stop the price-fixing and create a transparent market-based process for credit card interchange fees. The MPC says late last month, Senator Durbin, along with Senators Snowe, Kohl and Specter, sent letters to Visa and MasterCard asking for a detailed explanation of the process by which they set their interchange fee rates. According to a statement by Senator Durbin, responses by the card companies failed to adequately explain how they decide what interchange rates to charge. The MPC a/k/a UnfairCreditCardFees.com, is a group of retailers, supermarkets, drug stores, convenience stores, fuel stations, on-line merchants and other businesses.

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BofA Extends the Dallas Cowboys Contract

Bank of America and the Dallas Cowboys have announced a new multi-year sponsorship agreement. The 10-year agreement ensures that Bank of America will remain the Official Bank of the Dallas Cowboys and the club’s new stadium through 2019. Financial terms of the agreement were not disclosed. Under the new agreement which begins with the 2009 season, Bank of America will receive exclusive rights in the banking category; use of the Cowboys logo and other team marks in TV, radio, print and online advertising; stadium tickets and a corporate suite; in-stadium signage, ATMs and hospitality; a Dallas Cowboys fantasy camp for customers and clients; and extensive onsite advertising and tabling to promote the bank’s popular Dallas Cowboys Banking and Extra Points rewards program.

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FIS Releases its Xpress Deposit Product

Fidelity National Information Services has released “Xpress Deposit” remote deposit solution. Remote deposit makes it possible for consumers to scan checks from any location they choose, using widely available flatbed scanner technology, and send electronic images of the items to their financial institution for processing. This service complements FIS’ highly successful Commercial Capture Xpress solution for businesses and merchants. Fidelity National Information Services is a provider of core processing for financial institutions; card issuer and transaction processing services; mortgage loan processing and mortgage-related information products; and outsourcing services to financial institutions, retailers, mortgage lenders and real estate professionals.

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NRF Embraces Durbin’s Credit Card Bill

The National Retail Federation said that the Senate credit card antitrust legislation introduced shows momentum is building in Congress and that both the House and Senate are ready to bring the credit card companies’ “greed” under “controllation” that would require Visa and MasterCard to negotiate with merchants over hidden credit card processing fees. According to NRF estimates, the average U.S. family will pay $427 in credit card interchange fees in 2008. The NRF represents over 100 state, national and international retail associations.

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