British Politicans and Bankers Square-Off

Members of the British Parliament’s Treasury Select Committee took on the heads of Britain’s largest credit card programs last week week over credit card disclosure and pricing. Barclays, Lloyds TSB, Royal Bank of Scotland, and HBOS, agreed to offer more clarity to credit card terms and conditions via a summary box, similar to the one used within the USA. The banks were also criticized for taking advantage of the huge spread between the Bank of England base rates of 3%, and an average credit card interest rate of nearly 18%. Barclays made £450m from credit cards in 2002. The spirited debate between the bankers and the politicians led to the head of Barclays admitting he would not chronically borrow on credit cards because they are too expensive. However, all the bankers denied that profits from their credit card businesses were excessive.

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Politicians and Bankers Duke it Out Over Card Clarity

Members of Parliament’s Treasury Select Committee took on the heads of Britain’s largest credit card programs this week over credit card disclosure and pricing. Barclays, Lloyds TSB, Royal Bank of Scotland, and HBOS, agreed to offer more clarity to credit card terms and conditions via a summary box, similar to the one used within the USA. The banks were also criticized for taking advantage of the huge spread between the Bank of England base rates of 3%, and an average credit card interest rate of nearly 18%. Barclays made £450m from credit cards in 2002. The spirited debate between the bankers and the politicians led to the head of Barclays admitting he would not chronically borrow on credit cards because they are too expensive. However, all the bankers denied that profits from their credit card businesses were excessive.

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OCC Clears Sears – Citibank Card Deal

The OCC yesterday approved the acquisition by Citibank USA, of substantially all of the credit card accounts of Sears National Bank. Under current federal banking laws, Sears and Citicorp will be cleared to close their transaction, on or after, October 31st. Sears and Citibank announced their definitive agreement to sell Sears’ domestic private-label and bank credit card portfolio to Citigroup for more than $3 billion in mid-July. Other terms of the deal include payment for approximately $3 billion of Sears’ net invested capital, related to loan loss reserves. Sears also expects to receive approximately $200 million in annual performance payments from Citigroup based on items such as new account and credit sales generation activities. In addition, Sears expects to realize annual savings of more than $200 million as Citigroup will absorb costs associated with Sears’ zero percent financing program. (CF Library 7/16/03)

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Al Alrajhi Bank Deploys Diebold Opteva Units

Al Rajhi Banking and Investment Corporation has purchased more than 200 Diebold ATMs, including “Opteva” units. The units will operate on Diebold’s “Agilis” software platform, an open system that allows multiple vendors’ terminals and their respective technologies to co-exist. Al Alrajhi Bank has the largest branch and ATM network in the region. Diebold operates in the Kingdom of Saudi Arabia through its distributor Alhamrani Universal.

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CNBC Goes FreedomPay for Employees

CNBC has decided to deploy FreedomPay’s tap and go cashless payment and loyalty solution in its New Jersey employee dining facilities and employee commuter bus fleet. FreedomPay, Inc. is the world leader in business process outsourcing (BPO) to the nation’s largest hospitality food service providers, Fortune 1000 corporations, healthcare facilities, universities, sports and entertainment, and the military delivering a global infrastructure for world class payment, loyalty and settlement services.

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Household Adds $1B During Third Quarter

HSBC’s Household reported this week that its VISA/MasterCard third quarter receivables jumped by nearly $1 billion since the second quarter. Over the past twelve months, Household’s bank credit card outstandings have increased 11%, to $17,555,886,000. Quarterly charge volume is up 3.7% since 3Q/02 to $9.7 billion. Year-to-date, Household’s charge volume is $27.4 billion. Household’s active accounts have increased 15.4% in the third quarter to end at 12,627,000. At the end of the second quarter Household had $16,610,531,000 in credit card loans. Meanwhile, Household also announced this week the launch of the “Build Your Tomorrow” consumer education program. The program includes a $25,000 grand prize sweepstakes, 120 financial education workshops, $8 million in customer scholarships, and $3 million in financial education grants. Household has also partnered with Equifax to help consumers understand credit scores. For complete details on Household’s third quarter performance visit CardData ([www.carddata.com][1]).

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

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People’s Bank Grows Outstandings 6% since 2Q

CT-based People’s Bank reported yesterday that its efforts to rebuild its credit card business is paying off. During the third quarter, People’s posted an 18% gain in average receivables compared to one year ago. Net charge-offs for the third quarter improved by $10.7 million compared to the third quarter of 2002, and the net charge-off rate declined by 301 basis points to 4.76%. Delinquencies also decreased $25.8 million on a year-over-year basis and an improvement in the delinquency rate of 185 basis points to 2.68%. At the end of the third quarter People’s had $2.4 billion in outstandings, a 6% increase since the second quarter. For complete details on People’s third quarter performance visit CardData ([www.carddata.com][1])

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

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Business Cards are Key to Expense Management

Ontario-based Geac has found that companies are doing more with less by streamlining expense reporting
workflows and audit processes. The firm says 76% of its clients indicated that company credit card adoption was a key to expense management. Geac surveyed organizations representing some 125,000 Geac expense management users (of the more than 1 million worldwide) with a combined monthly document volume of over 200,000 expense reports.

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PayPal Introduces New Buyer Protection Program

PayPal has launched a new “Buyer Protection” program that gives buyers up to $500 of coverage for qualified transactions on eBay. Sellers qualify for the PayPal Buyer Protection program by maintaining a 98% positive feedback rating on eBay and having at least 50 feedback points. Sellers must also select PayPal on the “Sell Your Item” form, have a verified PayPal account and be based in the United States or Canada. In 1998, PayPal, an eBay Company, enables any individual or business with an email address to send and receive payments online securely, easily and quickly.

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Teens and Pre-Teens Receive and Spend Big on Clothing

Opinion Research Corporation has released a survey on teens and pre-teens that found more than 90% of both groups receive money to spend as they want, and that, by far, the top spending choice among teens is clothing. Just over half of teens (53%) and 60% of pre-teens get an allowance, which 86% of teens and 90% of pre-teens supplement with money from friends or relatives. At Opinion Research Corporation, we value the success of our clients and immerse ourselves in the business issues they face, the industries in which they compete and the audiences they serve.

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FleetBoston’s Portfolio Edges Upward in 3Q

FleetBoston reported yesterday that credit card outstandings edged up slightly during the third quarter to $14.8 billion, but remain down $700 million compared to 3Q/02. Since the first of this year Fleet’s outstandings have declined due to portfolio sales, lower balance transfers, a decline in cash advances, and other normal seasonal factors. For the third quarter, the delinquency rate increased to 3.91% compared to 3.89% for 2Q/03, and compared to 3.83% one year ago. Delinquency at the end of the first quarter was 3.83%. Charge-offs for the third quarter hit 6.80% compared to 6.56% in the prior quarter, and compared to 5.25% one year ago. Charge-offs for the first quarter were 5.16%. Fleet has about 9.4 million accounts. For complete details on FleetBoston’s third quarter results visit CardData ([www.carddata.com][1]).

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

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BofA Leads the Pack of ACH Payment Recipients

The Electronic Payments Association has released its first ever list of the top 50 largest receiving financial institutions of ACH payments which shows Bank of America topping the list with more than 507 million payments. A significant finding of the NACHA survey is that the receipt of ACH payments is much less concentrated than origination. The top 5 institutions accounted for 22 percent of ACH volume, compared to 49 percent on the origination side. NACHA is the leading organization in developing electronic solutions to improve the payments system.

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