Chase Renews the SWA Co-Brand Deal

Southwest Airlines and Chase Card Services have renewed their credit card agreement for the Rapid Rewards VISA Signature product line. The new products mark the 20th anniversary of the airline’s frequent flyer program, “Rapid Rewards”, and the continuing, long-standing relationship between Southwest Airlines and Chase. The enhanced rewards program includes: Eight Rapid Reward bonus credits (up from four Rapid Rewards credits) after a Cardmember’s first use of the card, plus up to eight more (up from five credits) when making a balance transfer within the first 90 days of opening an account; Two Reward Dollars for every one dollar spent on Southwest Airlines flight purchases and now on Southwest Airlines Vacations package purchases; Double Reward Dollars on Rapid Rewards Preferred Hotel and Rental Car Partner purchases; 1,200 Reward Dollars equals 1 Rapid Rewards credit, and it only takes 16 credits to equal a free, fully transferrable roundtrip Award; Two Rapid Rewards credits every year on the Cardmember’s Anniversary; and exclusive offers for Cardmembers who go to www.chase.com/southwest and provide their e-mail address. Southwest Airlines currently serves 63 cities in 32 states. JPMorgan Chase & Co. is a global financial services firm with assets of $1.4 trillion and operations in more than 50 countries.

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Convenience Drives Mobile Banking Roll-Outs

A new report has found that over 90% of the top 100 U.S. deposit institutions surveyed responded that the ability to provide greater convenience to their customers is an important or very important factor in the decision to roll-out a mobile banking service. Nearly half of these banks view the service as a defensive response and are considering adding mobile banking to avoid being left behind the competition. The report from Boston-based Aite Group also noted that within the next 24 months, basic fund transfer capabilities will be increasingly common as barriers such as security and standardization are overcome.

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Credit Risk Advisor is Launched

Experian has teamed with eCredit to launch “Credit Risk Advisor”, an end-to-end new account and portfolio management credit decisioning tool. Credit Risk Advisor enables users to develop and easily implement a credit policy that identifies areas of risk and opportunity across their entire portfolio. The new service also provides clients with flexible scorecards that meet the evolving demands of trade credit companies, including manufacturers, wholesalers and transportation businesses and automates the new account decisioning process by allowing business credit applications to be entered and instantly evaluated in a paperless online environment. All account information — including Experian credit scores, payment history, notes and approved credit limits — can be electronically routed within the credit department or between credit and sales, enabling clients to save time, reduce out-of-policy exceptions and improve cash-management productivity. The new service also will evaluate account portfolios using automated customer-defined rules and will aid in the immediate identification of unwarranted credit exposures before significant problems arise. Experian supports clients in more than 60 countries with annual sales of $3.5 billion.

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VantageScore Gains More Traction

Fingerhut has decided to leverage “VantageScore” for its portfolio reviews and I4 Commerce have recently decided to utilize “VantageScore” within its underwriting process. VantageScore is recognized as an alternative risk management scoring solution jointly developed by Equifax, Experian and TransUnion. All three credit reporting companies use the same VantageScore algorithm to calculate the credit score. VantageScore leverages the collective experience of the industry’s leading experts on credit data, scoring and analytics. In addition to Fingerhut and I4 Commerce, several other Equifax customers have begun using VantageScore within their underwriting processes for mortgage, credit card and pre-screen decisioning.

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VISA’s Debit Card Exit Fee Struck Down

A VISA By-Law that penalized larger debit card issuers for moving to MasterCard, after the settlement of the Wal-Mart litigation in 2003, has been ruled as unlawful and must be repealed. Federal Judge Barbara Jones made the ruling last week regarding to VISA’s By-Law 3.14 which subjected VISA issuers to “Settlement Service Fee” if they moved to MasterCard. Judge Jones also issued an order allowing all of VISA’s top 100 debit issuers, with VISA debit agreements that were signed while the “SSF” was in place, to terminate such agreements in the event that they enter into a new agreement with MasterCard to issue debit cards on MasterCard’s network. MasterCard sued VISA over the “SSF” in September 2003 after VISA declined to act on a “cease and desist” letter sent by MasterCard. The VISA by-law required VISA’s top off-line debit card members, who switch to MasterCard’s off-line debit card, to pay a $20 million fine for each percentage point of lost VISA off-line debit volume. (CF Library 9/19/03; 12/9/03)

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May U.S. Bankruptcy Filings Top 83,000

Bankruptcy filings have continued to surge this year running more than 60% over the year-ago levels. Momentum exploded in May with approximately 83,000 filings compared to 62,500 in April and 74,000 in March. If the current pace holds, it is likely the total filings for 2007 could approach one million. Also driving the momentum is the collapse of the sub-prime mortgage market. According the Administrative Office of the U.S. Courts the all-time quarterly record was set in the fourth quarter of 2005 when 667,431 bankruptcy filings were made. New bankruptcy laws took effect in late 2005.

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GSA Picks the Final Four for SmartPay 2

The U.S. General Services Administration last week named four firms as winners of its “GSA SmartPay 2” charge-card service contracts that are worth up to $260 billion in total. The winners include Citibank, GE Capital, Chase and U.S. Bank. Valued at an estimated $26 billion each year for 10 years, the contracts continue government-wide purchase, travel, fleet and integrated charge card services currently provided by GSA’s “SmartPay” program. “GSA SmartPay 2” will expand product and service lines to include prepaid and contactless cards, as well as cards in foreign currencies and other separately priced, value-added items. “SmartPay 2” also gives federal agencies enhanced agency spend analyses, program control and oversight, and improved payment services through new technologies. GSA manages more than one-fourth of the government’s total procurement dollars and influences the management of $500 billion in federal assets, including 8,600 government-owned or leased buildings and 205,000 vehicles.

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Ocwen Financial Buys Nationwide Credit

FL-based Ocwen Financial Corporation has acquired, by reverse merger, NCI Holdings, Inc. and its operating subsidiary, Nationwide Credit, Inc. NCI will be combined with Ocwen Recovery Group’s operations. The consideration for the merger is $55 million in cash, subject to certain closing adjustments. NCI’s senior executives, Chief Executive Officer and President Patrick Carroll, Chief Financial Officer George Williams and Executive Vice President of Operations Dale Bissette, are remaining with the company. Ocwen Financial Corporation is a provider of servicing and origination processing solutions to the loan industry. NCI is a global call center and receivables management company.

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FDC Completes the FundsXpress Acquisition

First Data has completed its acquisition of online banking and bill payment service FundsXpress. FundsXpress has more than 500 financial institution customers, consisting primarily of community financial institutions. First Data currently serves thousands of similar institutions coast-to-coast. Both First Data and FundsXpress will provide a strong and broad suite of products for secure electronic commerce and Internet banking transactions. First Data is a provider of electronic commerce and payment solutions for businesses worldwide.

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Flextronics To Acquire Solectron

Flextronics Intl has announced plans to acquire Solectron for the
creation of an enhanced design and electronics manufacturing
services conglomerate. With broad EMS capabilities, the new solution
will be available in 35 countries with combined annual revenues to
exceed $30 billion. Shareholders of Solectron will receive a total
consideration valued at approximately $3.6 billion. By combining
resources and unique skill sets, Flextronics will be able to provide more
value and innovation to customers by leveraging global
economies of scale. The partnership has a combined workforce of
approximately 200,000 employees, including approximately 4,000 design
engineers. For 2007, Flextronics had revenues of $18.9 billion, and helps
customers design, build, ship, and service electronics products through a
network of facilities in over 30 countries. Solectron offers design and
product introduction, supply chain management, lean manufacturing
and aftermarket services in more than 20 countries and had sales of $10.6
billion in fiscal 2006.

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NBK & MTC Offer Free SMS

With Mobile Telecommunication Company, The National Bank of Kuwait
will be offering customers a free-of-charge text-massaging service through
cell phones. To encourage the use of their new credit card, for each KD 1
spent on the Visa “NBK-MTC” credit card, the bank will offer customers 2
text messages at no charge. In addition, Mobile Telecommunication Company
allows cardholders international calling and roaming facility without a
prepay
financial deposit. Other benefits offered to cardholders include free
travel
insurance and the chance to gain points as a part of the Watani Gifts
Program.
The card is accepted at sell-points in more than 170 countries.

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