Cap One Exits Wholesale Mortgage Banking

Capital One announced that it will close origination operations at its GreenPoint Mortgage. The company estimated that the total after-tax charge associated with this closure will be approximately $860 million, or $2.15 per share, the vast majority of which is expected to be incurred in 2007. Approximately $650 million of these expenses result from the non-cash write-down of goodwill associated with the acquisition of GreenPoint Mortgage as part of the North Fork Bancorporation in December 2006. The remaining $210 million of after-tax charges includes approximately $100 million in after-tax restructuring charges associated with severance benefits and facilities closure, and approximately $110 million after-tax valuation adjustments related to ongoing operations in the third quarter. As a result of the expected charges, the company is revising 2007 earnings guidance down by $2.15 per share (diluted). The company now expects 2007 earnings of approximately $5.00 per share (diluted). Without the charges related to the mortgage banking business, the company would have maintained its existing earnings guidance.

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GPN EMV CERTIFICATION

Global Payments has completed end-to-end Europay MasterCard
VISA (EMV) chip certification for MasterCard and Interac Direct
Payment cards. This development allows Global Payments to process
EMV chip transactions throughout the country. EMV cards contain a
microchip that stores encrypted data to identifies the card and
cardholder, can carry security programs and will require PIN entry
protecting against unauthorized use. Global Payments provides electronic
transaction processing services for consumers, merchants, Independent
Sales Organizations, financial institutions, government agencies and
multi- national corporations around the world.

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TNB Lands a Seasoned Card Executive

TNB Card Services has named Phil Davis, formerly with Citigroup, as first SVP . He will focus on cardholder operations, including credit underwriting, member servicing, fraud, collections and recovery, and compliance. Davis has played an integral role in the credit industry. He was a charter member of the Bankruptcy Issues Council, which spearheaded bankruptcy reform, has served as a member of the National Foundation for Consumer Credit Advisory Council, and on the Board of Directors for the Consumer Credit Counseling Services of Virginia. At Citigroup, where he was a senior vice president in the Citicorp Credit Services division, he was responsible for building and directing the team that supported The Home Depot’s commercial credit business. He has also held executive positions in the card services division of Bank of America and the outsourcing division of NCO Financial Systems. Davis has a degree in management economics from Hampden-Sydney College.

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PREMIER MILES VISA

Citibank has launched the “PremierMiles VISA” credit card in the Asia-Pacific region which offers mileage redemption opportunities through four frequent flyer programs. Citi rewards 60,000 flyers miles to every
S$50,000 charged on the card, equating to 1.2 miles rewarded for
every S$1 spent. Furthermore, 5,000 bonus “Citi Miles” are awarded upon
the first purchase made, 10,000 upon renewal of the card and an
additional 10,000 upon renewal if at least S$50,000 is charged in the
previous year. The participating frequent flyer programs include Singapore Airlines’ “KrisFlyer”, NorthWest Airlines’ “WorldPerks”, Thai Airways’ “Royal Orchid Plus” and Cathay Pacific’s “Asia Miles”. The card also offers complimentary hotel room upgrades and discounts, “Priority Pass” membership granting access to more than 450 airport VIP lounges in
over 275 cities, travel assistance service and a first-year fee waiver.

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Triton Names a New Top Executive

ATM manufacturer Triton has hired William Bill Johnson, previous EVP at Hill PHOENIX, as CEO. Johnson, who has more than 22 years experience in leadership roles, comes to Triton from Hill PHOENIX, where he served as Executive Vice President with responsibility for the Case and Refrigeration Systems divisions. Prior to joining Hill PHOENIX, Johnson was President and CEO of Graham Corporation. In addition, he was with ESAB Welding and Cutting Equipment, a global welding and cutting equipment manufacturer, where he served as Vice President and General Manager. Johnson has a Bachelor of Science degree in Ceramic Engineering from Alfred University in Alfred, New York and an MBA from Rollins College in Lake Mary, Florida. Triton has expanded into the banking sector and into 22 countries, including the United Kingdom and Australia, as well as countries throughout Asia, Africa, Latin America and Europe.

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FAMILY FIRST FIGHTS FEES

Family First is pushing for legislation to stop excessive bank fees with its
“Australian Securities and Investments Commission (Fair Bank and Credit
Card Fees) Amendment Bill 2007”. The bill has been referred to the Senate
Economics Committee and is modeled after policy in the UK to restrain
fees. The potential legislation cites statistics that show that, over
the last five
years, late payment fees on credit cards have risen more than 50%,
Westpac’s credit card penalties have increased by 16-40% over the last
two years, and St George credit card penalties increased by 40-50% in the
last two years. The legislation is aiming to stop excessive bank penalty
fees
by ensuring penalty fees are for cost recovery only, boosting the powers of
the Australian Securities and Investments Commission (ASIC) fee monitoring,
and giving customers the right to sue banks for damages if they breach the
Act.

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Sub-Prime Card Issuers Post Strong Growth

Sub-prime credit card issuers continue to post higher growth than the overall industry. During the second quarter UT-based Merrick Bank posted a 23% year-on-year gain in outstandings and active accounts while SD-based First Premier Bank posted a 13% year-on-year gain in outstandings and active accounts. According to CardData (www.carddata.com) Merrick Bank had $956.1 million in credit card outstandings and 864,000 active accounts at mid-year. First Premier Bank reported $839.9 million in 2Q/07 outstandings and 3.4 million active accounts. Last week, Merrick reported it has now hit the one million cardholder milestone. CardWorks, Inc. is the parent company of Merrick Bank. Also last week, First Premier Bank agreed to settle with the New York State AG over its marketing practices including the charging of upfront fees upon card issuance. Under the terms of the settlement, First Premier will pay $4.5 million in refunds and $105,000 in penalties and costs. (CF Library 8/16/07; 8/17/07)

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TRANSUNION EXEC

TransUnion has appointed S.A. Raveendhrun as vice president of fraud
solutions to oversee theft prevention solutions in the Asia-Pacific market.
The appointment was made citing Raveendhrun’s experience in designing
and implementing fraud management strategies in the banking industry.
This experience includes his position as the head of the risk containment
unit for ICICI Bank retail banking, his time as founding chairman of the
India Payment Card Risk Council and as a consultant in the risk management
group at Citibank NA. Before this, Raveendhrun was employed with J.
Surendar & Company, American Express TRS in Delhi and obtained an
education with a degree in commerce from A.M. Jain College.

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Consumers Favor ID Theft Insurance

Bankrate has released a survey showing that 63% of Americans think identity theft insurance is a good idea. As part of the Financial Literacy project, Bankrate conducted a national poll with GfK Roper surveying Americans on insurance. Other findings of the poll include: 55% think trip insurance is unnecessary and in the event of financial hardship, Americans would drop life and/or disability insurance over health insurance. Bankrate is the leading aggregator of more than 300 financial products, including mortgages, credit cards, new and used auto loans, money market accounts and CDs, checking and ATM fees, home equity loans and online banking fees. Bankrate reviews more than 4,800 financial institutions in 575 markets in 50 states.

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CNB Teams with Postilion for Prepaid Cards

S1’s Postilion division and OK-based Central National Bank of Enid have teamed to offer prepaid card programs for community banks. Postilion provides a range of card management services and is fully EMV capable, in terms of card production, management and authorization capabilities, and can help organizations become PCI DSS compliant. CNB offers FDIC-insured prepaid card products, along with card issuing and card processing, to financial institutions that wish to enter the stored value card market. CNB has been issuing and processing prepaid cards since 2000.

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U.S. Web Users Subjected to Malware

Cyveillance has announced its latest “Online Financial Fraud and Identity Theft Report,” indicating U.S.web users are most vulnerable to attacks. The report indicates that U.S.-based Web surfers are more at risk to malware attacks and online identity theft schemes than citizens from other countries, with more than 63 percent of malware distributed on U.S.-based Web sites. In addition more than 2 million URLs world-wide distributed malicious downloads to site visitors. Cyveillance also determined that despite the rate of traditional phishing attacks leveling off, there was a 20% increase in the aggregate quantity of brands targeted, indicating that phishers continue to change targets. Since 2005 over 1,400 companies have been attacked. Cyveillance found that of the 284 brands targeted by phishing attacks for the first time during the second calendar quarter of 2007, more than 80 percent were U.S.-based financial institutions. These figures draw a distinct parallel to the total number of compromised credit cards found online, of which more than 80 percent were supplied by US issuers. Cyveillance is a provider of cyber intelligence.

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Real Security Summit Adds DOJ Speakers

Shift4 has added representatives of the U.S. Department of Justice to the roster of speakers for the 2007 Real Security Summit in Las Vegas, focusing credit card transaction security and combating terrorism According to a news account in washingtonpost.com, British investigators uncovered “a significant link between Islamic terrorist groups and cyber-crime, and experts say security officials must do more to understand and confront cyber-crime as part of any overall strategy for combating terrorism.” Three men who pleaded guilty in the British case were accused of using stolen credit card data to pay for terror-related recruitment and instructional Web sites, and to purchase suspect items, including bomb-making components. The men were also alleged to have laundered money obtained through stolen credit card numbers through Internet gambling sites. Shift4 is a developer of secure financial transaction processing software and services.

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