Voters Want Bankruptcy Reform

America’s voters believe that the Federal law allowing forgiveness of debt should be reformed, according to survey results released Wednesday. Asked to respond to a recent study concluding that those declaring bankruptcy were forgiven $4 billion in debt they could have repaid, 76% were critical and 43% were outraged.  The survey of 1000 registered voters was conducted via telephone last week by Frederick Schneiders Research of Washington, D.C. Among Republicans, independents and those whose incomes exceeded $32,000 annually, the support level was 91%.


CashSource Plus 200/400

Diebold introduced yesterday the CashSource Plus 200 and CashSource Plus 400, the most recent additions to its low-cost family of cash dispensers designed for the growing off-premises market.  The CashSource Plus 200, designed as a low-cost retail offering, features a 5.7-inch, color display for easy customer interface.  Transactions are confirmed via a Visa II dial-up POS message format.  The CashSource Plus 400 is designed for retail off-premises locations which required enhanced functionality.  It features a larger eight-inch, full VGA color display for greater visibility and advertising capabilities.  Communication is completed using full ATM protocol via dial-up or leased lines.  Diebold’s 911/912 message format allows the cash dispenser to be operated in an ATM deployers current network.


Millennium Adds Data Jacks

Nortel, a leader in advanced public access solutions, today announce a jack option for its wall mounted Millennium(x) MultiPay MultiCard terminals. This innovative feature allows Millennium payphone users to take full advantage of mobile computing by delivering a data communications port to public areas such as airports, hotel lobbies, truck stops, convention centers and other locations where business travelers require access to their network. By integrating the RJ-11 port into the phone’s card reader bezel, Nortel’s Millennium payphone provides users with an easy-to-use phone that offers a range of payment methods such as smart cards, credit cards, and calling cards.

According to the August 1997 Yankee Group study, “Understanding the Next Phase of Mobile Computing,” mobile computer sales are increasing at a rate of 23 percent annually. Nortel’s Millennium phones equipped with data jacks will enable these mobile computer users to access their private email, corporate intranets, the Internet, and information databases from the public arena. Conveniently located on the front of the phone near the card reader bezel, the data jack is easy to find and easy to use. In addition, bi-lingual visual prompts on the Millennium phone’s florescent display provide instructions for use and payment. The visual prompts can be programmed to operate in either English, Spanish, Japanese or French.

After a successful trial, U S WEST plans to deploy its Millennium Data Stop, Nortel Millennium phones equipped with data jacks, in select locations throughout its 14 state area. “More and more people are carrying laptop computers, and these people need convenient public access to data communications,” said Mike Goebel, new product development manager, U S WEST. “Many travelers cannot wait until they arrive at an office or their hotel room; they need immediate access to their data, and Nortel’s Millennium phones are the obvious solution.”

Nortel’s Millennium MultiPay MultiCard with data jack will enable new revenue streams and comprehensive reporting to payphone service providers. In addition, the phones are equipped with a card reader, which increases the security of calling card numbers and eliminates concern about onlookers. The Millennium phones also interface in real time with financial institutions to obtain positive card validation and monitor cards for suspicious use.

The Millennium MultiPay with data jack is available as both a factory installed option and a field upgradeable feature. There are currently more than 150,000 Millennium payphones throughout North America. More information on Nortel’s public communications access terminals is available by calling 800-4NORTEL (800-466-7835).


AmEx Czech Cards

Komercni Banka and American Express today launched the American Express Card in the Czech Republic.  The launch follows an Independent Operator agreement between the two companies announced in September of 1997.   Under the terms of the Independent Operator agreement signed in September, Komercni Banka acquired the right to conduct the American Express Card-issuing business in the Czech Republic.  Komercni Banka is responsible for all operations supporting the American Express Card  including billing and payment systems, accounting, customer servicing, credit and fraud control, and charge authorizations  and marketing the Card in the Czech Republic.  Since the two companies joined forces in 1997, the number of merchants accepting the American Express Card in the Czech Republic has expanded significantly, enhancing the relevance and utility of the Card to customers there.


Unsigned Card Apps Spell Trouble

Increasingly, banks are looking to the latest electronic advances to remain competitive and provide their customers with rapid credit approval and related services. Many banks now take credit applications by phone and fax and are expected to shortly accept applications over the Internet. However, while the latest technology may greatly speed the process, the courts have ruled that a signature is still necessary in all transactions.

“Get it in writing,” warns the April issue of Lending & Risk Management News, a monthly newsletter published by RMA, the association of lending and credit risk professionals. John B. Montgomery, Esq. and Edward J. Kuna, Esq. of the banking and finance group of the Pittsburgh law firm of Tucker Arensberg, point to a recent case in the Federal District Court in Colorado as the basis for their warning.

At issue in the Colorado case was whether a computer-generated statement of financial condition in a credit application — neither signed nor seen by the debtors — constituted a “writing” under the Bankruptcy Code. While applying for a line of credit and credit card over the phone, the debtors were questioned about their financial condition, and the loan officer entered the information into the computer system. On the basis of that information, the application was approved, and the borrowers never saw nor were asked to sign a written application.

Eventually, the borrowers filed for bankruptcy and sought discharge of their debts, including that owed the lender. In Bankruptcy Court, the lender objected to the discharge of its debt on the basis of alleged fraudulent statements made by the debtors to the loan officer. To satisfy the “writing” requirement, the lender offered a computer-generated printout of information entered into its computer system by the loan officer during his conversation with the debtors. The Bankruptcy Court denied the objection, a ruling sustained by the District Court.

The Court found that while the ordinary conduct of modern business may allow for the enforcement of contracts made by phone, facsimile transmission or other electronic means, this special requirement that an exception to discharge must be based on a “statement in writing” cannot be waived by the Courts. A computer-generated loan application does not constitute a “statement in writing.”

Montgomery and Kuna warn lenders to carefully analyze their loan procedures. “While the electronic age may compel them to use non-traditional means to obtain customers and speed transactions, lenders should be certain they do not outstrip current law at the risk of their depositors and shareholders.”

For additional information on this or other articles in Lending & Risk Management News, contact RMA, 1 Liberty Place, Suite 2300, 1860 Market Street, Philadelphia, PA 19103. Telephone 215-446-4000.

RMA is the premier international association of lending and credit risk professionals. Founded in 1914, its membership consists of more than 3,000 financial service providers. These institutions are represented in the association by more than 18,000 commercial loan and credit personnel in 50 states, Puerto Rico, Canada and numerous foreign cities including Hong Kong and Singapore.


Metris’ Pause

Despite no marketing campaigns in the first quarter Metris still added 25,000 accounts and about $70 million in receivables to its card portfolio. As of March 31, Metris held $3.6 billion in card loans and 2.2 million accounts and logged $747 million in first quarter card volume. However above average delinquency and chargeoffs still dog Metris. The net chargeoff rate was 8.8% and 30+ day delinquency rate stood at 7.4%. Both figures would have been higher had it not been for the purchase accounting related to two recent portfolio acquisitions. Metris also reported yesterday its fee income increased 68% to $56.3 million due in part to a change in company policy for billing over-limit fees.


Cash America on a Roll

Cash America International, Inc. (NYSE:PWN) announced today that net income increased 20% in the first three months of fiscal 1998 compared to the prior year.

Net earnings reached $4,534,000 (18 cents per share) for the three months ended March 31, 1998 compared to $3,790,000 (15 cents per share) for the three months ended March 31, 1997. Total revenue increased 10% in the first quarter of 1998 to $84,194,000 from $76,519,000 in the first quarter of 1997.

The earnings increase was driven by a 44% increase in net earnings from the Company’s core lending activities. Lending operations produced net earnings of $5,528,000 in the first three months of 1998 versus $3,844,000 during the same period in 1997. The first quarter is a significant period from a seasonal standpoint and Cash America benefited from higher loan balances coming into the quarter. Net revenue from lending activities were up 10% in the three month period ended March 31, 1998 reaching $47.5 million compared to $43.2 million in 1997.

Check cashing operations, conducted through Cash America’s wholly owned subsidiary Mr. Payroll Corporation, reported a net loss of $941,000 in the first three months of 1998, almost 4 cents per share, compared to a loss of $54,000 in the same period last year. Mr. Payroll Corporation developed a fully automated check cashing machine in June of 1997 and began commercial deployment in late 1997 and in the first quarter of 1998.

Commenting on the results of the first quarter, Chairman and Chief Executive Officer Jack R. Daugherty said, “Cash America posted the strongest first quarter performance in the Company’s history in its core lending business. We reached earnings goals through the execution of a consistent strategy of loan growth and rapid liquidation of merchandise in 1997 and kept the momentum going into 1998. Higher loan balances generated increased finance and service charge revenue and the disposition of merchandise available for sale was improved over the prior year, leading to significant gains in net revenue from lending activities.”

Daugherty added, “The performance of our core business allowed us to support the development of Mr. Payroll operations during the quarter. The potential benefits of Mr. Payroll’s check cashing activities will be realized in future years and our investment today is necessary in order to have the opportunity to achieve its long term objectives.”

Also during the quarter, Cash America announced that it had added 14 new lending locations and entered into a letter of intent to acquire a 40 unit pawnshops chain during the second quarter of 1998. The additions further the Company’s standing as the largest operator of pawnshops.

Additionally, the Company announced that the Board of Directors, at its regularly scheduled quarterly meeting, declared a $0.0125 (1.25 cents) per share cash dividend on common stock outstanding. The dividend will be paid to shareholders of record on May 5, 1998 and will be paid at the close of business on May 19, 1998.

Cash America International, Inc. is a diversified provider of specialty finance services to individuals in the United States, United Kingdom and Sweden. Cash America is the largest provider of secured non-recourse loans to individuals, commonly referred to as pawn loans, through 415 locations in 16 states and two foreign countries. In addition, the Company provides check cashing services through its wholly owned subsidiary, Mr. Payroll Corporation, and rental services through its wholly owned subsidiary, Express Rent A Tire, Inc.

This release contains forward-looking statements about the business, financial condition and prospects of Cash America International, Inc. and Mr. Payroll Corporation (“the Company”). The actual results of the Company could differ materially from those indicated by the forward-looking statements because of various risks and uncertainties including, without limitation, changes in demand for the Company’s services, changes in competition, the ability of the Company to open new operating units in accordance with its plans, economic conditions, real estate market fluctuations, interest rate fluctuations, changes in the capital markets, changes in tax and other laws and governmental rules and regulations applicable to the Company’s business, and other risks indicated in the Company’s filings with the Securities and Exchange Commission. These risks and uncertainties are beyond the ability of the Company to control, and, in many cases, the Company cannot predict all of the risks and uncertainties that could cause its actual results to differ materially from those indicated by the forward-looking statements.

Cash America International, Inc.
Highlights of Consolidated Results of Operations
(In thousands, except per share data)

Three Months Ended
March 31,
1998 1997

Consolidated Operations:
Total Revenue $ 84,194 $ 76,519
Net Revenue 48,698 44,058
Total Operating Expenses 38,416 35,125
Income from Operations 10,282 8,933
Interest Expense 3,007 2,806
Net Income $ 4,534 $ 3,790

Net Income Per Share – Basic $ 0.19 $ 0.16
Net Income Per Share – Diluted $ 0.18 $ 0.15

Weighted Average Shares – Basic 24,429 24,245
Weighted Average Shares – Diluted 25,633 24,875

Segment Results:

Lending Operations —

Total Revenue $ 82,112 $ 75,635
Net Revenue 47,498 43,174
Total Operating Expenses 35,737 34,225
Income from Operations 11,761 8,949

Check Cashing Operations —

Total Revenue 1,529 884
Net Revenue 795 884
Total Operating Expenses 2,214 900
Loss from Operations (1,419) (16)

Rental Operations —

Total Revenue 553 —
Net Revenue 405 —
Total Operating Expenses 465 —
Loss from Operations (60) —

Financial and Operational
Data as of: 3/31/98 3/31/97 12/31/97
——– ——– ——–
Lending Operations —

Loans Outstanding $108,907 $101,732 $112,240
Merchandise Held
for Disposition 51,585 45,455 53,468

Number of Locations
(not in thousands) 415 385 401

Amounts Per Location —


Loans Outstanding $ 262 $ 264 $ 280
Merchandise Held
for Disposition 124 118 133


Loans Outstanding $ 176 $ 173 $ 199
Merchandise Held
for Disposition 138 134 150

Check Cashing Operations —

Average Number of Units
During the Period (not in thousands) —

Franchised Check
Cashing Units 146 150 150
Automated Check
Cashing Machines 32 — 5

Annualized Amount of
Checks Cashed Per Average Unit —

Franchised Check
Cashing Units $ 6,522 $ 5,488 $ 5,017
Automated Check
Cashing Machines 2,348 — 1,733


AmEx Expands Platinum Free Tix

American Express announced Wednesday that Ireland’s Aer Lingus and Aerolineas Argentinas, have joined the Platinum Card International Airline Program.  The program, one of the benefits of the Platinum Card from American Express, offers Platinum Card members complimentary companion tickets on 14 international airlines with the purchase of full-fare first or business-class tickets.  Platinum Card members may take advantage of the complimentary companion tickets as often as they like.  Tickets on the participating airline are available from May 1, 1998, through April 30, 1999, and must be purchased through Platinum Card Travel Services.  There is a maximum of one complimentary companion ticket per trip, per Platinum Card member traveling.  The companion ticket must have the same itinerary as the cardmember, and travel must originate from the United States within one of the three distinct travel periods and be completed by April 30, 1999.


Official CTST Conf Card

Giesecke & Devrient America, Inc. (G&D America), a world leader in the development and production of cards and card systems was selected by CardTech/SecurTech (CTST) to provide the official conference smart card for the world’s most prestigious card and security technology trade event which will take place April 27-30 at the Washington Convention Center in Washington, D.C.

G&D America’s CTST Conference Card

The multi-application CTST Conference Smart Card uses both contact and contactless technologies as well as a conventional magnetic stripe. G&D America is providing all conference cards for the show which is expected to attract 10,000 visitors from more than 70 nations.

The CTST card incorporates G&D’s highly regarded STARCOS(R) operating system for contact applications and utilizes a MIFARE(R) chip for contactless applications. In integrating a broad range of conference functions, the card provides an electronic purse capability for vending machine and merchant use, and sophisticated customer lead tracking data for exhibitor use. The cards will also be used by seminar attendees for lunches and to pick up conference proceedings.

Product Demonstrations at CardTech/SecurTech Conference at Booth No. 1620

G&D will showcase its new C@ppuccino(TM) Java(TM) Card and development toolkit, which provides an integrated and easy-to-use Java Card 2.0 compliant programming environment. C@ppuccino smart cards can be used in a wide range of smart card applications including secure payment, telecommunications, multimedia, and transportation. In addition, G&D America will present a variety of other contact and contactless smart card technologies including:

Electronic purse applications:

— G&D’s STARCOS SV(R) multi-application operating system in a first-ever demonstration of multi-currency Visa(R) Cash purchase transactions over the Internet.

— G&D’s ICAROS(R) intelligent card operating system supporting the PROTON(TM) electronic purse.

— Mondex(TM) cards in a variety of purchase applications. (G&D Security Card Systems is one of a select group of manufacturers certified for all aspects of Mondex card production including fabrication, personalization, enablement, and customization.)

Loyalty and Biometric Applications:

— Multi-retailer loyalty cards in cooperation with Score Promotions. A flexible, scaleable loyalty server will be demonstrated that is ideal for coalition marketing programs.

— G&D cards used with fingerprint recognition from American Biometrics to secure personal computer user access.

Contactless smart card technologies:

— G&D’s LOCO-LOCK(R), an innovative, ruggedized contactless technology developed for high-speed rail applications.

— G&D’s MIFARE(R), LEGIC(R), and OTI(TM) contactless technologies.

GSM SIM card applications:

— G&D’s STARSIM(R) Phase 2+ multi-application SIM operating system, including the commands and features of the STARSIM Development Toolkit.

Card dispenser:

— The G&D Smart Card Dispensing Machine (SCDM) with special commemorative prepaid telephone cards from the Global Chip Card Alliance/US West and GTE.


Giesecke & Devrient GmbH is a world leader in the development and production of cards and card systems, including microprocessor, memory, and magnetic stripe cards. A privately-held Munich-based corporation, Giesecke & Devrient employs 4,300 people worldwide in its operating units in Germany, Belgium, Spain, Mexico, China, Russia, Singapore, Australia, South Africa, Canada, and the United States.

The rapidly expanding G&D America manages over 900 employees and is a wholly owned subsidiary of Giesecke and Devrient. The Virginia-based company focuses its North American sales and development efforts on products for Giesecke & Devrient’s Card and Card Systems Division and its pioneering currency processing systems which are used by major central banks and leading commercial banks throughout the world.

G&D’s integrated North American Cards and Card Systems strategy links Giesecke & Devrient Cardtech, Inc. of Cleveland, OH with Giesecke & Devrient Security Card Systems, Inc., Toronto, ON and Giesecke y Devrient de Mexico S.A. de C.V., Mexico City, which permits G&D to address the full spectrum of card applications ranging from magnetic stripe cards to advanced multi-application smart card environments. The combined production capacities of the three s gives G&D one of the largest capacities of any North American card and card systems manufacturer. In addition to these production facilities, G&D America also operates research facilities in Philadelphia, Pennsylvania and Bedford, Massachusetts. For further information, please contact G&D America toll free at 800-296-4371 or see the Giesecke & Devrient GmbH web at [][1]

[1]: http://


VISA Check Card Up 72%

Visa reported Tuesday that its member banks issued 12.4 million new check cards, brining the total number of Visa check cards in the market to 58 million, a 27 percent increase over 1996. Also, the number of check card transactions in 1997 grew by 60 percent to 2 billion. Or approximately 63 transactions every second. The total dollar volume of Visa check card transactions grew to $93.7 billion, and 72 percent increase over 1996’s total of $54 billion. Visa also says it expects continued strong growth for the check card, reaching 5.5 billion consumer transactions annually by 2001, or about 10 percent of all personal consumer expenditures in the United States.


NCR Taps Into Off-Premise ATM’s

NCR Corporation and Access Cash International have teamed up to create a formidable partnership supplying ATMs to booming off-premise markets in the United States and Canada. Under a wide-ranging agreement between the two partners, NCR and Access Cash have developed a unique marketing relationship to distribute ATMs throughout the U.S. and Canada to customers ranging from community banks to convenience stores. NCR and Access Cash will market the full range of models in NCR’s innovative personaS family of self-service terminals. NCR shipped a record 42,440 ATMs worldwide in 1997, maintaining its 11th straight year of leadership, including 8,441 units to off-premise locations in the United States.


More 1Q Data

The first quarter contraction continues with the following results from Card Management Information Service’s ‘First Quarter 1998 Portfolio Survey’:

KeyCorp $1,456,769,986 $1,530,378,234
First Empire $228,868,000 $257,533,000
First Security $196,410,772 $205,686,368
Simmons $162,207,045 $177,043,975
Frst Nat Marin $108,590,152 $111,586,662

Source: Card Management Information Services