Students Fail Personal Finance

American college students bounce checks, revolve credit card purchases and will rack an average of $15,000 in post-graduate according to recent survey conducted by Quicken. The survey found that 67% of college students now have credit cards with 71% of student cardholders revolving balances monthly. Almost half of the students surveyed admitted to bouncing a check during college. The Quicken survey found that less than half of college students balance their checkbook on a monthly basis, and almost three out of four students have called home and asked their parents for money.  Yet, twenty-seven percent of students make a valiant effort of keeping track of their money by trying to record at least some of the checks they have written.  Additionally, 10% of students leave their finances up to their parents and 9% leave balancing their checkbook up to fate. Most students estimate they will have an average debt of more than $15,000 upon graduation.  Interestingly, incoming freshmen who are probably less familiar with the cost of college expect to have approximately $8,300 in debt upon graduation, while their senior counterparts expect to have accumulated more than $16,000 in post-graduate debt.


Seinfeld Carded

Credit card commercials from VISA and MasterCard will claim a spot in tonight’s ‘Seinfeld’ finale. Yesterday VISA announced it will debut a new 30-second commercial targeted at ‘Generation Xers’. VISA’s commercial will be a slightly offbeat spot that features funky music, hip GenXers and popular vintage clothing. Created by BBDO NY, the spot is titled “Attic” and is the latest installment in Visa’s highly successful “It’s Everywhere You Want To Be” campaign and is part of Visa’s brand campaign featuring merchants. The ad, targeting the twenty- and thirty-year-old segments, features trendsetters strutting their stuff at The Attic, a stylish vintage clothing store that “does not accept American Express. Pumping lyrics accompany split-second images of bright boas, sharkskin slacks and go-go boots.  It could be mistaken as a clothing ad until the familiar voice of Ed Grover sets you straight. VISA will reportedly shell-out about $1.5 million for the spot.


NCR – TBS  Team

NCR Corp. and TBS First Inc. announced Wednesday a business alliance to offer solutions for the retail entry-level ATM market. Under the new alliance, TBS will contribute its electronic commerce software, sales and marketing experience to enhance this retail ATM solution. In addition, TBS will become the exclusive distributor in Canada, the United States and Latin America of NCR’s current mini-ATM, ‘The Cash’, and other future joint developed co-branded ATM solutions.  The distribution network will be made through the TBS Business Partners Plan.


Mondex Israel

Mondex Israel launched a pilot of ‘Mondex Electronic Cash’ in the town near Tel Aviv yesterday.  This pilot is the 23rd implementation of Mondex to-date. Mondex Israel is jointly owned by Discount Investment Corp. and the Paz Group. The pilot is being conducted in Rehovot, a mid-sized city in the centre of Israel, with a population of around 85,000 and with 1,000 retailers.  Rehovot is best known as the site of the Weizmann Institute of Science, a world-famous advanced science learning and research centre, which has a student population of 5,000. The pilot phase will be accompanied by a multimedia advertising campaign produced by the Kesher Barel agency, using the tagline “Mondex -Israel’s Electronic Cash”.


First Data Dividend

First Data Corporation declared a regular quarterly dividend of $0.02 per common share yesterday.  The dividend is payable on July 15, 1998, to shareholders of record on July 1, 1998.

Hackensack, N.J.-based First Data Corporation is a global leader in payment systems, electronic commerce and information management products and services.  First Data and its principal operating units process the information that allows millions of consumers to pay for goods and services by credit, debit or smart card at the point of sale or over the Internet; by check or wire money.  For more information about First Data, please visit the Company on the Internet at [http//][1].



AmEx KnowledgeBase

American Express TRS and NC-based KnowledgeBase Marketing announced a partnership Tuesday to develop a series of products and services — ranging from turnkey customer acquisition and loyalty programs to advanced data warehousing services. The new services will become available to merchants for the first time later this year, and will be developed, packaged and priced to meet the needs of several merchant segments. American Express selected KnowledgeBase Marketing in conjunction with Yankelovich Partners for the depth and breadth of expertise and resources the collaboration of those two companies provide.


Citibank Card Bonds Rated

Citibank Credit Card Master Trust I’s (CCIMT I) $1.25 billion floating-rate class A credit card participation certificates, series 1998-7, are expected to be rated ‘AAA’ by Fitch IBCA. The corresponding $80 million floating-rate class B certificates are expected to be rated ‘A+’.  In addition, Fitch IBCA expects to affirm its master trust ratings, indicating the issuance of series 1998-7 will not result in a reduction or withdrawal of current ratings assigned to outstanding trust certificates.

The expected ratings reflect the quality of the receivables generated from Visa and MasterCard credit card accounts, the available credit enhancement, the servicing expertise of Citibank (South Dakota) and the transaction’s sound legal and financial structures.

Class A’s enhancement, equal to 11% of the total initial invested amount, is derived from a 5% shared cash collateral account (CCA) and the subordination of the 6% class B certificates.  The shared CCA will first support class A then class B, covering losses not paid by excess finance charge collections.  Class B’s enhancement, equal to 7% of the total initial invested amount, is derived from a 2% CCA dedicated just to class B, along with the 5% shared CCA.

Credit enhancement levels were determined by stressing portfolio steady state yield and payment rate assumptions to determine the level of defaults the enhancement could sustain.  Class A is able to support a 35% decrease in yield, payment rates dropping in half and defaults increasing to a level above 30% and still make full and timely payments to investors.  Class B can sustain a 25% decrease in yield, along with a decline in payment rates by more than 40% and defaults increasing to a level above 25%, while meeting all investor principal and interest obligations.

Class A investors will receive monthly interest payments of one-month LIBOR plus 0.01% and class B investors will receive one-month LIBOR plus 0.125% throughout the revolving and accumulation periods and on the scheduled final payment date.  If an early payout occurs, class A and B investors will receive principal on an accelerated schedule, along with monthly interest payments.  Following the variable accumulation period, principal is expected to be paid to class A and B certificate holders on the May 2000 distribution date.  Series termination is set on May 2002’s distribution date.

Series 1998-7’s terms contain an accelerated payout feature to protect investors from deteriorating collateral or a servicer default.  If certain triggers are breached, the amounts available in the 5% shared CCA will be drawn upon and immediately distributed to class A investors.  In addition, the 2% CCA dedicated solely to class B will be drawn upon and immediately distributed to class B investors.


Base24  &  Mondex

Applied Communications announced yesterday the availability in Canada of Mondex functionality for ACI’s ‘BASE24’ application software.  The ‘BASE24’ solution enables financial institutions to fully integrate chip cards into their electronic banking system and offer chip card products and services through existing and new delivery channels. Applied Communications Canada of Toronto, designed and built enhancements to ‘BASE24’ enabling it to accept, authorize and process smart card transactions using standards adopted by Mondex.  BASE24 facilitates value load and value unload at Mondex-enabled ATMs, POS terminals and other devices, and supports communications between components such as terminals, value managers and vaults to facilitate chip-to-chip functions that do not require authorization. Canadian Imperial Bank of Commerce is the first ACI customer in Canada to add the new Mondex capabilities to their BASE24 processing engine.


MoneyGram Tx Up 12%

MoneyGram Payment Systems, Inc. reported today that its net income for the three months ended March 31, 1998 was $1.8 million, or 11 cents per common share, compared with $2.2 million, or 13 cents per share, in the first quarter of 1997.

Total revenue for the quarter was $34.8 million, compared with $32.4 million in the year-earlier period.  The 1998 revenue total includes $1.35 million from Mid-America Money Order Company and Consorcio Oriental LLC, which were acquired by MoneyGram during the first quarter of this year.

Transactions handled by MoneyGram in the first quarter totaled 1.44 million.  That compares with 1.28 million transactions handled in last year’s first quarter, an increase of 12 percent.

The Company also announced that, in order to protect shareholder value, the Board of Directors of MoneyGram Payment Systems yesterday approved, and the Company entered into, a shareholders’ rights agreement.  Pursuant to the rights agreement, the Company will dividend to shareholders as of record on May 20, 1998 the right to purchase one share of Common Stock of the Company for each share held at an exercise price of $50.00.  In the event a person who does not already own more than 15% of the Common Stock of the Company crosses such threshold or a person who already owns 15% increases its ownership percentage, each rights holder other than such person upon payment of the exercise price will be entitled to purchase Common Stock with a market value of $100.00.  Alternatively, the board may elect to effect a “cashless exercise” of the rights.  The rights will not trade separately from the Common Stock, and no certificates will be mailed to shareholders until the above ownership threshold is crossed.  The board may elect to redeem the rights at a nominal value at a future date.  The rights plan provides that successful completion of the Viad tender offer would not trigger the rights.

MoneyGram Payment Systems, Inc. is a leading non-bank provider of consumer money transfer and other financial services.  Through the MoneyGram network of more than 22,000 convenient agent locations, customers can wire cash in minutes to more than 100 countries throughout the world.  MoneyGram ExpressPayment(SM) service enables credit card issuers, mortgage servicers, finance companies, collections companies and others to collect good-funds payments from delinquent debtors within hours.  The Company was organized in January, 1996 and completed the initial public offering of its common shares on December 11, 1996.

                       MoneyGram Payment Systems, Inc.
                           Statement of Operations
                         Three months ended March 31
                   (in millions, except per-share amounts)

                                     1998                    1997
     Fee and other                  $28.9                   $26.3
     Foreign exchange                 5.9                     6.1
    Total Revenue                    34.8                    32.4

     Agent commissions               11.5                    11.0
     Processing                       8.0                     6.0
     Advertising & promotion          7.0                     6.0
     Selling & service                2.5                     3.0
     General & administrative         3.0                     2.8
    Total Expenses                   32.0                    28.8

    Income before income taxes        2.8                     3.6
    Income tax expense                1.0                     1.4
    Net Income                       $1.8                    $2.2
    Basic net income per
     common share                    $.11                    $.13
    Diluted net income per
     common share                    $.11                    $.13
    Weighted average shares and
     equivalents outstanding       16,600                  16,625


Credit Store Chairman

Credit Store, Inc. announced Tuesday that Martin J. Burke, the Company’s Chief Executive Officer, will add the title and duties of Chairman of the Board.

Mr. Burke succeeds Jay L. Botchman, 65, who indicated to the Company that he wishes more time to devote to his other endeavors. Mr. Botchman remains a member of the Board and he retains his approximately $50 million debt and equity investments in Credit Store, Inc.

The Credit Store’s other senior management remains unchanged. Kevin T. Riordan is the Company’s President and Chief Operating Officer. Mr. Riordan directs the Company’s approximately 300 employees in the day-to-day operations in Sioux Falls. He is also holds responsibility for quality assurance and strategic planning for the Company. Mr. Riordan joined Credit Store, Inc. in April, 1997 from Long Beach Acceptance Corp., an automobile finance company focused on the nonprime and sub-prime markets, where he was president and chief operating officer.

In Sioux Falls, Mr. Riordan is joined by Michael J. Philippe, the Chief Financial Officer and Treasurer; and Richard S. Angel, the Chief Counsel and Secretary of the Company.

Mr. Burke, 40, has been the Company’s Chief Executive Officer since its inception in 1996, and has primarily been involved in securing the Company’s financing and setting its strategic direction. He previously was chief executive officer and a principal at American Home Credit Corp., a mortgage banker which originates and sells sub-prime mortgages. From 1984 to 1995, he was chief executive officer of The Martin Burke Company, an advisor and originator on behalf of clients of hybrid commercial mortgage loans.

Credit Store Inc. is a nationwide financial services company that markets credit cards to consumers who previously had had an interruption in the repayment of their debts and may be excluded from the more traditional sources of consumer finance. The Company uses sophisticated methods to analyze, value and purchase portfolios of non-performing consumer debt from major institutional lenders at a substantial discounts. The Company then uses its direct marketing expertise to contact and negotiate settlements with the consumer, most of the time placing settlement on the new unsecured credit cards offered through the Credit Store. The Company offers an innovative and practical way for the consumer to rebuild their creditworthiness and gain access to an unsecured credit card.


Bankruptcy Coalition Supports Child Support

Official Statement From Bankruptcy Coalition

Current bankruptcy law unequivocally protects the obligation of parents to support their children. We recognize the need to ensure, as specifically as possible, that any reform to the bankruptcy code must maintain the special status afforded to alimony and child support payments. In recent days, there has been considerable confusion and conjecture regarding how pending bankruptcy reform legislation would affect the priority of child support and alimony payments in a bankruptcy proceeding. In fact, the bills currently under consideration on Capitol Hill would in no way change the priority of those payments.

However, in order to address any remaining confusion, we would wholeheartedly endorse an amendment to the pending bills that would specifically and categorically state that child support and alimony payments must be given priority in bankruptcy proceedings. We have communicated our position on this matter to members of both the House and Senate Judiciary Committees. We are certain that appropriate legislative language will clear up any possible confusion on this important matter. American Banker’s Association

American Financial Services Association

America’s Community Bankers

Bankruptcy Issues Council

Consumer Bankers Association

Credit Union National Association

Independent Bankers Association of America

National Retail Foundation

U.S. Chamber of Commerce