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News Scan July 2015

Credit Card News, Economy News, Banking Industry News - Apr 2014
30
July
  • American consumers continue to show signs they are recovering from the Great Recession by steadily increasing their credit card debt, according to data from the latest National Consumer Credit Trends report released today by Equifax.
  • Total credit card debt rose to $634 billion at the end of the second quarter, a 5 percent jump compared to $604 billion a year ago. The Equifax data also revealed the rate of growth in credit card debt more than doubled year over year in many of the metro areas hit hardest by the housing market crash, and more than tripled in other cities less affected by the crash. This suggests that consumer confidence in the American economy is growing across the board.
  • In each of the nation's top 25 metro areas, consumers increased credit card debt by at least 3 percent in 2015 compared to a year earlier. This is a marked contrast to the second quarter of 2014, when just eight of the top 25 markets saw as much as a 3 percent gain over the previous year.
27
July
  • Earnings at large US banks were generally up on a linked-quarter basis during second-quarter 2015 as the industry showed some glimmers of improving net interest margins, says Fitch Ratings. Among the 12 large banks with material loan portfolios included in Fitch's quarterly US bank earnings report, half reported margin expansion. It is unclear whether this marks an inflection point for these banks, but it does reverse a multi-quarter trend of NIM compression due to the low interest-rate environment.
  • Results were also aided by good fee income and still benign credit costs. Noninterest income benefitted from mortgage banking, wealth management, and investment banking, particularly loan syndication fees for the large regionals.
  • However, Bank of America, Citi, JPMorgan Chase, Goldman Sachs and Morgan Stanley all reported lower capital market revenues on a linked-quarter basis following the seasonally stronger first-quarter 2015. All, except Morgan Stanley, reported modestly lower capital market revenues from a year ago as well, following a good second-quarter 2014. Much of the sequential decline for all five banks was due to much lower FICC revenues, which fell 30% in aggregate on a linked-quarter basis.
26
July
  • U.S. energy companies are planning more layoffs, asset sales and financial maneuvers to deal with a recent, sudden drop in U.S. crude-oil prices to under $50 a barrel, the lowest level in four months.
  • The companies had been banking on a rebound in oil prices in the second half of 2015 after falling sharply late last year. Prices began to regain ground in the spring, rising so quickly that some American producers started hiring back drilling rigs to pump more crude. That speedy return to the oil patch and the threat of new Iranian oil production have pushed down prices more than 20% over the past six weeks to $48.14 as of Friday , bringing storm clouds back to the energy patch.
  • Oil-field services providers that help drill wells have quietly revealed job cuts that were deeper than initially announced, and warned of more layoffs to come. Halliburton Co. and Baker Hughes Inc., two big service companies that plan to merge, disclosed last week that they had cut 27,000 jobs between them, double the 13,500 they announced in February.
22
July
  • Interest rates on new credit card offers stayed in place again this week, according to the CreditCards.com Weekly Credit Card Rate Report.
  • For the fifth week in a row, the national average APR remained at 15 percent. None of the cards tracked by CreditCards.com advertised new rates. Promotional offers, including interest-free balance transfer offers and introductory purchase APRs, were also left unchanged.
  • For the second time this year, Capital One eliminated the $19 annual fee on its Platinum card. The issuer had removed the card's annual fee in January, but reintroduced it in March.

Weekly Rate Report
  Avg. APR Last week 6 months ago
National average 15.00% 15.00% 14.89%
Low interest 11.62% 11.62% 10.24%
Balance transfer 14.12% 14.12% 12.80%
Business 12.85% 12.85% 12.85%
Student 13.14% 13.14% 13.14%
Cash back 15.27% 15.27% 14.91%
Airline 15.10% 15.10% 15.52%
Reward 15.14% 15.14% 14.89%
Instant approval 18.00% 18.00% 23.33%
Bad credit 22.73% 22.73% 22.73%

21
July
  • The U.S. Office of the Comptroller of the Currency on Tuesday said it had granted conditional approval to merge Cit Bank into OneWest Bank into a combined bank named CIT Bank.
  • U.S. small-business lender CIT Bank said last year it would buy California bank OneWest Bank NA for $3.4 billion in cash and stock, a deal that will give CIT a more reliable source of funding.
  • The approval came after the regulator considered a batch of public comments, the OCC said.
20
July
  • Hillary Clinton, sounding a populist note, says that she wants to raise tax rates on capital gains. That would be a job-destroying disaster for both the middle class and the poor she pretends to care about.
  • The details aren't all in, but it's clear Clinton wants higher taxes on capital gains as a kind of two-fer — a tax hike on the "rich" to give more money to Big Government, and more votes to her and other "inequality" warriors on the left.
  • An unnamed "campaign official" told the Wall Street Journal that Clinton seeks at least three new rates on capital gains, which would change based on how long a person holds the investment.
14
July
  • In an earnings season that is expected to be lackluster, bank profits should be a bright spot.
  • The top six firms’ most recent regulatory filings, obtained through the Freedom of Information Act, show little or no change in the number of units, which range from 1,300 to 3,400.
  • J.P. Morgan Chase & Co. and Wells Fargo & Co. kick off the bank reporting period Tuesday morning. Consensus among analysts surveyed by FactSet is the financial sector as a whole, and banks specifically, should provide a boost to overall earnings growth.
13
July
  • You may sign up for a premium credit card because of the rewards, but you may not even realize that it’s packed full of hidden benefits. One of the biggest reasons to always use a credit card for every purchase (in addition to getting points, of course) is that you can always dispute a charge with the issuing bank serving as third-party arbiter — that’s great protection. But better cards come with additional benefits, and your card probably has several of the following:
  • Purchase protection: When I dropped my cell phone on the sidewalk two months after I bought it, I shattered the glass screen. I used a Chase Sapphire Preferred Card to pay for the phone, and for that card Chase covers “your new purchases for 120 days against damage or theft up to $500 per claim and $50,000 per account.” I called Chase up and got connected with the insurance provider. We went back and forth on some paperwork and then I received a check for $314.99 to cover the repair.
  • Rental car collision coverage: Premium cards usually come with coverage for your rental car. You still need liability coverage, but if you ding the car you’re usually not going to be on the hook. Most coverage is secondary, meaning the card company pays what your own insurance doesn’t ( more or less means your deductible, and if you don’t have insurance, the card is in effect covering everything). Some cards — like Chase Sapphire Preferred, United Explorer, and Diners Club — come with primary coverage. If you ding the rental, your own insurance may not even have to know. There are some limits. A few countries — including New Zealand and Israel — may not be included in coverage, and there are limits to how expensive of a car you can rent. But usually you can just decline the rental company’s costly collision waiver and still be fine as long as you charge the full cost of the rental to your card with the coverage.
12
July
  • Former Texas Republican Congressman Ron Paul outlines his view on the U.S. economy, saying the labor market isn’t nearly as strong as some commentators are suggesting and that the Federal Reserve is unlikely to raise the interest rate later this year. (Source: US Economy ‘Booming’ – Fed Rate Hike On The Way?, July 10, 2015.).
  • The latest report shows that the number of people who applied for U.S. unemployment benefits climbed to their highest since February. Paul cited, “the number did not meet expectations or slightly worse than expected and it wasn’t a disaster.” He added, “…because the total number still remains below 300,000 is considered not a real weak economy.”.
  • After the financial crisis in 2008, labor participation has dropped significantly. Paul thanks the Federal Reserve’s Keynesian policies saying, “…number shows that the recovery did not do anything but drive everybody into non participation.”
08
July
  • Interest rates on new credit card offers remained untouched this week, according to the CreditCards.com Weekly Credit Card Rate Report.
  • For the third week in a row, the national average annual percentage rate held tight at 15 percent.
  • None of the cards monitored by CreditCards.com offered new interest rates. Promotional APRs and 0 percent balance transfer offers were also left unchanged.

Weekly Rate Report
  Avg. APR Last week 6 months ago
National average 15.00% 15.00% 14.89%
Low interest 11.62% 11.62% 10.24%
Balance transfer 14.12% 14.12% 12.80%
Business 12.85% 12.85% 12.85%
Student 13.14% 13.14% 13.14%
Cash back 15.27% 15.27% 14.91%
Airline 15.10% 15.10% 15.52%
Reward 15.14% 15.14% 14.89%
Instant approval 18.00% 18.00% 23.33%
Bad credit 22.73% 22.73% 22.73%

07
July
  • International pressure is mounting on Greece and its European creditors to reach agreement and steer the eurozone away from a potentially disastrous “Grexit”.
  • The US treasury secretary, Jack Lew, told Greece’s prime minister and its new finance minister, that Washington “looked forward” to a swift resolution to the crisis unfolding in Europe.
  • He told the German chancellor, Angela Merkel, that Greece would bring a new proposal to the table at an emergency eurozone summit on Tuesday, days after Greeks voted overwhelmingly to reject the conditions of a previous bailout plan proposed by the country’s creditors.
06
July
  • Twelve of the largest U.S. banks are trying yet again to persuade regulators they can safely navigate bankruptcy without tanking the broader financial system.
  • Summaries of “living wills” from firms including J.P. Morgan Chase & Co. and Goldman Sachs Group, Inc. were published Monday on the websites of the Federal Reserve and the Federal Deposit Insurance Corp. The stakes are high: If the plans don’t please regulators, firms could be forced to break up or shrink.
  • Among the new details: Banks have rethought how they would run a bankruptcy process, emerging significantly smaller than their current size or, in the case of Goldman Sachs and Morgan Stanley, ceasing to exist after selling themselves off in pieces.