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News Scan Apr 2013

Credit Card News, Economy News, Banking Industry News - Apr 2013
Apr 2013
  • The financial crisis that started in 2007 may have forced many investors to learn things the hard way.
  • According to an April 2013 study called "Five Years Later," the losses and hardship investors faced during the recession has inspired them to make positive behavior changes when it comes to money.
  • In 2008, 64 percent of investors described themselves as "scared and confused." However, more than half of them (56 percent) describe themselves as "prepared and confident" today.
  • The reasons for this change in outlook? Nearly three-quarters (72 percent) repaid debt, 42 percent increased their emergency savings and 88 percent understand their finances better than they did before the downturn.
Apr 2013
  • Unemployment rates fell from March 2012 in 39 states and the District of Columbia, increased in eight, and was the same in three.
  • From February, rates dropped in 26 states and the District of Columbia rose in seven and was unchanged in 17.
  • Nevada had the sharpest decrease over the year - the rate fell to 9.7 percent from 11.6 percent in March 2012.
  • In California the unemployment rate fell to 9.4 percent, the lowest since December 2008 and more than a percentage point below March 2012, when it was 10.7 percent.
  • Nevada's rate also rose from 9.6 percent in February and the state lost 2,900 jobs during the month.
  • Rhode Island had the second biggest decline from the year before, with its jobless rate dropping to 9.1 percent from 10.6 percent in March 2012, followed by Florida, where the rate was 8.9 percent compared to 7.5 percent the year before.
Apr 2013

Regulators to Crack Down on Bank Payday Loans

Source: americanbanker Category: Banking Industry News
  • The Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp. will soon impose strict limits on so-called deposit-advance loans.
  • Among the regulators' intended mandates are a month-long "cooling-off period" between the repayment of one loan and the issuance of another and a requirement that banks underwrite the product.
  • Those changes could force FDIC- and OCC-regulated banks offering the small-dollar loans, which are similar to payday loans offered by nonbanks, to either dramatically, change their products or drop them entirely.
  • Meanwhile, the Consumer Financial Protection Bureau is considering a crackdown of its own.
  • The agency released a report released that drew strong parallels between traditional storefront payday loans and the deposit-advance loans offered by banks, and hinted at reforms that would affect banks and nonbanks alike.
Apr 2013
  • American Express has announced that it will begin issuing Corporate Cards with EMV chip & signature technology to its U.S. Corporate Cardmembers.
  • In some countries, chip technology is becoming standard for card authorizations. By providing a chip-enabled solution, the new chip & signature Cards will help U.S. Corporate Cardmembers avoid disruptions while traveling internationally.
  • American Express says it currently offers cards with EMV chip & PIN and chip & signature capabilities in other global markets.
Apr 2013

ATM fees on the rise

Source: creditcards Category: Banking Industry News
  • ATM surcharges are on the rise, but consumers are pretty adept at avoiding them, according to an April 2013 report from the U.S. Government Accountability Office.
  • According to the report, which was based on bank surveys and market research data, the approximately 420,000 ATMs throughout the U.S. had surcharge fees that averaged $2.16 at banks and $1.99 at credit unions in 2012. That's a 20 percent rise from 2007.
  • Only about 14 percent (275 million out of the 1.67 billion ATM transactions) resulted in a surcharge in 2011, however, which suggests that many consumers are finding ways to avoid the charges, such as using in-network ATMs.
  • The chart below shows the average ATM surcharge amounts for banks and credit unions for the years 2007 through 2012.
Apr 2013
  • Consumer prices fell in March for the first time in four months as the cost of gasoline tumbled.
  • The Labor Department said its Consumer Price Index slipped 0.2 percent, unwinding some of the 0.7 percent increase in February.
  • In the 12-months through March, consumer prices rose 1.5 percent, the smallest increase since July. Prices had increased 2.0 percent in February.
  • Stripping out volatile energy and food, consumer prices rose only 0.1 percent after advancing 0.2 percent in February. That took the increase over the 12 months to March to 1.9 percent. The so-called core CPI had increased 2.0 percent in February.
  • In March, gasoline prices dropped 4.4 percent after spiking 9.1 percent the prior month. Food prices were flat after edging up 0.1 percent. There is still no sign of a pass-through from last summer's drought.
  • Though overall housing costs maintained their steady rise, owners' equivalent rent -- which accounts for about a third of the core CPI -- rose only 0.1 percent after rising 0.2 percent in February.
  • Apparel prices dropped 1.0 percent, the largest decline since April 2001, after falling 0.1 percent in February.
  • New motor vehicle prices edged up 0.1 percent after falling 0.3 percent the prior month. Prices for used cars and trucks rose 1.2 percent, the largest since April.
Apr 2013

Poll: Card debt the No. 1 taboo subject

Source: creditcards Category: Credit Card News
  • About 85 percent of Americans said they are reluctant to chat about their credit card debt with someone they first met, compared to 80 percent who gave the same answer in an identical poll conducted in 2008.
  • Women were more uncomfortable talking about card debt, with 88 percent saying they were uncomfortable, compared to 81 percent of men.
  • Credit card debt is a less-taboo topic in the northeastern part of the US. Only 76 percent of respondents in that region weren't willing to talk about their debt, compared to 85 percent, 86 percent and 89 percent in the Midwest, South and West respectively.
  • Americans age 50 to 64 were more likely to carry a balance (39 percent) than younger age groups.
  • Even those who don't carry a balance said they were reluctant to discuss the topic of credit card debt (83 percent).
Apr 2013

Small business confidence sags in March

Source: Reuters Category: Economy News
  • Confidence among small businesses fell in March, the latest indication that economic activity lost momentum as the first quarter ended.
  • Optimism index fell 1.3 points to 89.5 last month. The survey came on the heels of last week's soft employment and manufacturing data.
  • Employers added the fewest jobs in nine months in March, while factory activity expanded at its slowest pace in three months.
  • The NFIB survey showed the share of owners anticipating better business conditions in the next six months remained in negative territory. The outlook for the labor market, sales and inventories dimmed last month.
  • Small business owners, however, were optimistic about earnings and credit conditions.
Apr 2013

Consumers prefer mobile banking to mobile payments

Source: creditcards Category: Banking Industry News
  • Proponents of mobile payment technology, which lets you link a payment card to an app and pay with your phone, tout the convenience of leaving your wallet at home.
  • Just 6 percent of smartphone users have made a point-of-sale payment with their phone, while more than a third of them don't see any benefit to mobile payments and would prefer to pay with another method.
  • Concerns about security are the main barrier to mobile payment adoption, although they're becoming less of a concern, the survey found.
  • Thirty-eight percent of respondents in this year's survey said they had security concerns, compared with 42 percent in 2011.
  • It's not that consumers are opposed for using their phones for financial purposes. Nearly half (48 percent) of smartphone users used their phones for mobile banking in the past 12 months. Forty-two percent have used their phones to comparison shop.
Apr 2013

More taxpayers reaching for credit cards

Source: creditcards Category: Credit Card News
  • Almost three-quarters of Americans who owe taxes are planning to use checking accounts or their savings to pay taxes this year but a growing number will be reaching for their credit cards.
  • Fourteen percent say they'll pay taxes with plastic this year, compared with 7 percent in 2012 and 10 percent in 2011.
  • Meanwhile, 7 percent will use credit card reward points to pay down at least some of what they owe to Uncle Sam, compared with 1 percent in 2012 and 3 percent in 2011.
  • Many plan to use their refunds to improve their financial picture, either by paying down debts (37 percent) or padding their savings (26 percent).
  • However, 28 percent plan to spend their refunds on travel, their families, home improvements or a big-ticket item.
Apr 2013
  • Private employers added 158,000 jobs in March, the smallest gain in five months.
  • Revisions to February's jobs gains were more positive, with the private payrolls figure raised to an increase of 237,000 from the previously reported 198,000, though January was revised down to 177,000 from 215,000.
  • That report includes both public and private sector employment and is expected to show a gain in overall nonfarm payrolls of 200,000 last month, while the unemployment rate is seen holding steady at 7.7 percent.
Apr 2013

Small businesses cut borrowing for second straight month

Source: Reuters Category: Banking Industry News
  • Small U.S. businesses cut back on borrowing in February for a second straight month.
  • The PayNet Small Business Lending Index, which measures the overall volume of financing to small U.S. companies, fell to 101.3 from a downwardly revised 111.7 in January.
  • But small business borrowing grew just 2 percent from a year earlier, the index showed, and the slowest year-on-year increase since September. PayNet had initially reported the January figure at 113.1.
  • Trucking companies, whose behavior historically has led that of other small businesses, are having more trouble paying back their loans.
  • Delinquencies of 31 to 180 days among transportation service and warehouses companies rose to 1.85 percent in February.
Apr 2013
  • To kick off Financial Literacy Month, the (NFCC) and the Network Branded Prepaid Card Association released their annual Financial Literacy Survey.
  • The survey questioned 2,037 adults to gauge Americans' attitudes about personal finance.
  • Although the percentage of Americans who say they pay bills on time and have no debts is up to 71 percent (from 64 percent in 2012), a strong majority (77 percent) say they still have financial worries.
  • The biggest worry is not having enough savings for emergencies or retirement, a worry more than half of Americans share.
  • Meanwhile, 26 percent of Americans are apprehensive about not being able to meet their financial obligations, including debt.
  • Credit is another source of worry about one in five Americans is anxious about their credit scores and lack of access to credit.
  • Despite worrying about credit scores, the survey found that most consumers aren't doing much about it 65 percent failed to review their credit reports in the past year.
Apr 2013
  • An increasing number of states across the country are considering legislation that would block the ability of retailers to surcharge consumers who pay for a purchase using a credit card.
  • The trade group said 28 states have either put such bans in place or are considering them.
  • That ability used to be forbidden by card acceptance agreements between retailers and the major card brands, but those rules were dropped as part of a proposed settlement to ongoing antitrust litigation between some retailers, the major card brands and six major credit card issuers.
  • But retailers opposed to the settlement terms have used the easing of restrictions on surcharging as an example of how the settlement falls short.
  • Nonetheless, even the possibility that some retailers, somewhere, might surcharge a transaction conducted on a card appears to have fired lawmakers' imaginations and led them in 18 states to propose adding such surcharging to their books, according to the association.
  • Ten states, California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas already had such surcharging bans in place.