IRS to Expand Credit Counseling Audits

The IRS yesterday reported that it has been auditing 63 credit counseling agencies. To date, the audits of 41 organizations, representing more than 40% of the revenue in the industry, have been completed. All of the completed audits have resulted in revocation, proposed revocation or other termination of tax-exempt status. The IRS also noted that it has also tightened up its review of new applications by credit counseling firms for tax-exempt status. Since 2003, about 100 applications have been reviewed but only three have been approved. The IRS is also sending compliance inquiries to each of the remaining 740 known tax-exempt credit counseling agencies not already under audit.

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USA Technologies’ Q1 Revenues Climb 44%

PA-based USA Technologies reported revenue of $1.6 million for the first three months of this year, an increase of 44% compared with the same period in 2005. Gross profit for the period was up 21% to $687,749. The Company says the strong revenue growth for the quarter came as a result of significant increases in sales of USAT’s “EnergyMiser” energy management solutions, “e-Port” for cashless transaction solutions, and the online “e-Suds” online laundry system. During the quarter, USAT launched the “e-Port Generation Six,” the world’s first cashless transaction solution for vending machines that integrates contactless card capability with the traditional swipe card process. The new product is currently undergoing marketplace trials by MasterCard in hundreds of vending locations across multiple US cities. For complete details on USA Technologies’ latest results, visit CardData ([www.carddata.com][1]).

[1]: http://www.carddata.com

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US Bank Intros Sportsman’s Warehouse VISA

U.S. Bank and Sportsman’s Warehouse have partnered to offer the “Sportsman’s Warehouse Rewards VISA Platinum” card, which offers three points for every $1 spent in net purchases at Sportsman’s Warehouse and one point for every $1 spent in net purchases elsewhere. New customers will receive a 1,000-point bonus when they make their first purchase. Specialty Rewards Certificates are redeemable towards outdoor merchandise and gear and clothing.

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Acies Lands a Sales and Marketing Expert

New York-based payment processor Acies Corporation has hired former Chase executive Harrison Fisher as its new SVP/Sales and Marketing. Previously while recently serving as Vice President in charge of Small Business in the East Coastal Market at JPMorgan Chase & Co., Fisher oversaw daily general and sales management, marketing, finance and overall operations of Small Business Banking for New Jersey, Florida and Staten Island, New York, and is credited for the successful turnaround of this market’s operations. Fisher is a graduate of Hofstra University where he earned a Bachelors degree in Business.

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Trintech Forms Financial Services Group

Trintech Group has announced the formation of its
“Financial Services Group”, which will provide next-generation account
reconciliation and enterprise-wide positive pay solutions to financial
institutions for the provision of the same to their small business,
middle market and large corporate clients. Trintech’s “Financial
Services Group” will provide consulting, design, implementation, service
and support to help organizations improve reconciliation processes,
strengthen internal controls, mitigate risk and increase compliance.

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ATM REPORT

Last year the ATM market in central and eastern Europe grew by 26%,
reaching a total of 68,904 deployments. Over two thirds of the region’s
installed base is in the big three markets of Russia, the Ukraine and
Poland and together with Romania and Bulgaria, these countries
accounted for over 90% of the growth in the region’s installed base
during 2005. The study by Retail Banking Research also found that NCR
remains the largest ATM supplier in the region. In 2002 Russia regained
its position as CEE’s largest ATM market, a position it last held in
1998. It now has 27,640 machines. The Ukraine has been in second place
since 2004, now with an installed base of 10,565 terminals. Between 1998
and 2002, Poland was the largest ATM market in the region but it has now
fallen to third with 8,815 installations. For the fifth year running,
the Russian market showed the largest absolute growth, adding over 7,500
machines to its installed base in 2005, over half the growth for the
region overall. The Ukraine saw almost 2,500 new installations. Retail
Banking Research was founded in 1979 and is a strategic research and
consulting firm.

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Variable Card APRs Top 16% Per Annum

In the wake of the Fed’s decision last week to raise short-term interest rates, increased credit card interest rates will show up in many credit card statements later this month and nearly all variable rates by June 30th. Since the Fed started tightening rates in July 2004, the average variable credit card interest rate has soared from 11.58% to 16.02%, according to CardTrak (www.cardtrak.com). More than 82% of credit card accounts now carry variable interest rate structures. Most of the top issuers charge at least nine points over the prime rate for standard accounts which means a return to 17%-18% APRs. Cardholders forced to pay the issuer’s highest rate, or punitive rate, are now facing interest rates above 30%. When the Fed was chopping interest rates between 2001 and 2003, the prime rate fell more than 400 basis points from about 8% to 4%, however, credit cardholders only realized a rate reduction of about 200 basis points. Ironically, during the current tightening the prime rate has increased 400 basis points and credit cardholders have watched their cards increase by at least 400 basis points.

CREDIT CARD INTEREST RATES
Month Prime Fixed Variable
May 04 4.00% 12.64% 11.58%
Jun 04 4.00% 12.69% 11.61%
Jul 04 4.25% 12.79% 11.73%
Aug 04 4.50% 12.85% 11.89%
Sep 04 4.75% 12.88% 12.11%
Oct 04 4.75% 13.00% 12.19%
Nov 04 5.00% 13.04% 12.37%
Dec 04 5.25% 13.09% 12.49%
Jan 05 5.25% 13.22% 12.67%
Feb 05 5.50% 13.25% 12.84%
Mar 05 5.75% 13.32% 13.08%
Apr 05 5.75% 13.39% 13.17%
May 05 6.00% 13.48% 13.45%
Jun 05 6.00% 13.59% 13.61%
Jul 05 6.25% 13.64% 13.84%
Aug 05 6.50% 13.76% 14.24%
Sep 05 6.75% 13.80% 14.49%
Oct 05 6.75% 13.87% 14.64%
Nov 05 7.00% 13.91% 14.89%
Dec 05 7.25% 13.93% 15.20%
Jan 06 7.50% 14.08% 15.53%
Feb 06 7.50% 14.11% 15.75%
Mar 06 7.75% 14.15% 15.81%
Apr 06 7.75% 14.19% 15.99%
May 06 8.00% 14.23% 16.02%
Source: CardTrak (www.cardtrak.com)

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Global Travel Limited Accepts UATP Corporate Cards

Global Travel is now accepting all “Universal Air Travel Plan”
cards in the global network. Global Travel will settle all UATP
transactions through “UATP Settlement Services,” a low-cost, weekly
settlement system that matches fees and air tickets electronically,
allowing for easy reconciliation of accounts for travel agents and their
customers for non-clearinghouse transactions. UATP accounts are
accepted as a form of payment for corporate business travel by airlines
and travel agencies worldwide.

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