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News Scan Mar 2013

Credit Card News, Economy News, Banking Industry News - Mar 2013
Mar 2013
  • Employment improved and housing prices rose in most major U.S. metropolitan areas in the final quarter of 2012, but output sputtered.
  • Among the 100 largest areas, 78 posted job gains during the fourth quarter, while job growth rates accelerated in 57 metropolitan areas.
  • Six of those areas were in Texas: Austin, Dallas, El Paso, Houston, McAllen and San Antonio.
  • Most metropolitan areas started 2013 with brighter job pictures than the year before. In January, 227 out of all 372 metropolitan areas in the country had unemployment rates lower than January 2012.
  • Home prices have been rising in recent months and were up an average of 0.3 percent across the country during the fourth. Altogether, home prices increased in 85 out of the largest 100 areas during the fourth quarter.
  • Rising home prices are seen as an indicator of the economic recovery gaining momentum.
Mar 2013
  • As of November 2012, 28 percent of all mobile phone users and 48 percent of smartphone users had used mobile banking in the past 12 months.
  • The use of mobile financial services is particularly prevalent among the 10 percent of the population that is underbanked (people with bank accounts but who use check cashers, payday lenders, or payroll cards).
  • Among the 90 percent of underbanked consumers with mobile phones, 49 percent had used mobile banking in the 12 months proceeding November 2012, up from 29 percent in December 2011.
  • Mobile phones may also allow for the extension of financial services to an additional 10 percent of the population that is unbanked (those without a bank account), as 59 percent of this group has a mobile phone, half of which are smartphones.
  • While the use of mobile banking increased 33 percent between 2011 and 2012, the report indicates that many consumers remain skeptical of the benefit of mobile banking and the level of security associated with the technology.
  • Notably, the use of mobile phones to deposit checks has doubled between surveys, with 21 percent of mobile banking users having deposited a check with their phone in the 12 months prior to November 2012.
  • Among smartphone owners, 42 percent had used their phone to compare prices while shopping and 44 percent had used their phones to browse product reviews in store.
Mar 2013

Half of Americans Want to Break Up the Big Banks

Source: Americanbanker Category: Banking Industry News
  • A survey has found that 50% of U.S. adults would favor a plan to break up the largest banks.
  • The survey, conducted March 19-20 with 1,000 adults, also found that 23% of adults oppose breaking up the biggest banks, while 27% are undecided.
  • Concern over whether some banks are "too big to fail" has reached fever pitch in recent weeks, with numerous lawmakers and other public officials weighing in about the size of the largest institutions.
  • The report appears to confirm that most of the public is still angry at big banks following the 2008 financial crisis.
  • Banks did receive at least some good news in an earlier poll conducted by Rasmussen. The polling group surveyed 1,000 adults between March 11 and 12, and found that 53% of Americans are at least somewhat confident in the stability of the banking industry, including 10% that are very confident.
  • The survey found 43% of Americans lack confidence in banks, with 11% saying they are "not at all" confident.
Mar 2013

Small Business Loans Up: SBA

Source: Cutimes Category: Banking Industry News
  • Loans ranging from under $100,000 to $1 million experienced small increases in the fourth quarter.
  • Among the depository lending community, the larger institutions of $1 billion or more helped offset the declines in lending by the smaller lending depository institutions.
  • Small business lending by institutions with assets of $50 billion or more followed the general trend and remained unchanged.
  • Both small and large business lending are only slightly improving, but small business lending has increased for the first time in ten quarters by 0.4%.
  • According to the latest data small business lending increased from $584.1 billion in September 2012 to $586 billion in December 2012.
  • Meanwhile, the SBA said the economy continues to strengthen due to improving financial conditions and low interest rates, with lenders reporting easing lending standards on both commercial and industrial loans and commercial real estate loans.
  • Lending terms were loosened for C&I loans. Although lenders also reported increased demand for both types of loans, conditions for CRE loans remained relatively tight.
  • In fact, overall small business lending continued to be slowed by CRE loans, which have yet to turn upward.
Mar 2013
  • 39% of undergraduate students between the ages of 18 and 24 owned a credit card in 2012, down from 49 percent in 2010.
  • And young adults who do have credit cards are carrying smaller balances: A median of $1,600 in 2010 compared with $2,500 in 2001 for under- 35 households.
  • Credit bureaus and the lending industry are stepping up their search for new ways to bolster credit files, and young people who don't pay credit card bills often do pay mobile phone bills.
  • As reporting agencies gather data from telephone, rent and other payments, some scoring models incorporate it to help assess candidates' creditworthiness.
  • If the only way to get credit is to borrow, young people are going to be slower to borrow.
  • Total credit card debt declined by $25 billion, or 3.6 percent, for the fourth quarter of 2012 from the same period in 2011. Since the fourth quarter 2007, it has dropped about 19 percent.
  • The decrease has been marked among consumers younger than 35, Credit card use for young people began declining prior to the recession, and between 2007 and 2010 dropped 20 percent.
  • The share of young American households carrying a credit card balance fell to 39 percent in 2010 from 48 percent in 2007.
Mar 2013
  • Industrial production rose more than expected in February on a rebound in manufacturing, showing the economy continues to gain momentum in 2013.
  • Industrial production grew 0.7 percent last month. Manufacturing output rose 0.8 percent during the month, snapping back from a decline in January.
  • Industry capacity utilization, a measure of how fully firms are using their resources, rose to 79.6 percent in February. That was the highest average since March 2008 when it was 80.1 percent.
Mar 2013
  • A bounce back in vacant retail positions lifted the number of jobs open in the United States in January, but the overall tone continued to point to only a moderate improvement in the labor market.
  • Job openings a measure of labor demand - increased to a seasonally adjusted 3.7 million in January from 3.6 million in December.
  • Retail sector job openings increased by 34,000 in January after declining the prior month.
  • Job openings in manufacturing and construction rose modestly. There was also a small increase in government job openings. Vacancies declined in education and health services, and leisure and hospitality.
Mar 2013
  • Commercial and multifamily mortgage debt rose by 0.9% in the fourth quarter from a year earlier, to $21.8 billion, marking the highest year-over-year improvement since the second quarter of 2008.
  • Banks and thrifts took on $17.1 billion of the debt, a 2.1% increase from the fourth quarter of 2011. Government-sponsored entities took on $7.6 billion, a 2% rise.
  • The increases were offset by securities issuers, which decreased their holdings of commercial/multifamily debt by $6 billion, or 11.3%.Total mortgage debt rose by $29.7 billion, or 1.2%, from the end of 2011.
  • Multifamily mortgage debt rose 1.4% from Sept. 30 and 4.4% from a year earlier, to $846 billion at Dec. 31.
  • Government-sponsored entities hold $376 billion, or 45%, of multifamily mortgage debt; banks and thrifts hold $234 billion, or 28%.
  • Commercial banks held the largest share of commercial/multifamily mortgage debt, at $836 billion, or 35% of the total.
Mar 2013

Fed: Card balances rise in January

Source: Creditcards Category: Credit Card News
  • Credit card balances rose only a slight 0.1 percent in January, despite a fiscal cliff cut in take-home pay and higher prices at gasoline pumps that cut into consumers' spending power.
  • But overall consumer debt, including revolving and nonrevolving loans, rose more strongly 7 percent in January, on top of December's revised 6.6 percent increase.
  • Mainly that (increase) was driven by student loans, where the risk is being picked up by the federal government.
  • Revolving debt, which is chiefly made up of credit card debt, rose to $850.9 billion, after falling a revised 4.4 percent in December to $850.8 billion
  • The first look at debt markets of 2013 came amid economic crosscurrents that were pulling consumers in different directions.
  • Overall consumer debt including cards plus auto loans and student loans was $2.795 trillion in January, up from $2.779 trillion in December on a seasonally adjusted basis.
  • For the full year of 2012, revolving debt was up 0.4 percent and nonrevolving debt was up 8.4 percent.
Mar 2013
  • The pace of growth in the vast U.S. services sector accelerated to its fastest pace in a year in February, helped by a rise in new orders and demand for exports. Services index rose to 56 from 55.2 in January.
  • The new orders index jumped to 58.2 from 54.4, while orders for exports rose to their highest level since May 2007 with that gauge at 60.5, up from January's 55.5.
  • The measure of the backlog of orders was at its highest since May 2011 at 54.5 against 49. But the employment index weakened slightly, edging down to 57.2 from 57.5 in January.
  • The service sector appeared to be expanding despite U.S. government belt-tightening and higher payroll taxes that have reduced consumers' disposable income.
  • Earlier, ISM's manufacturing sector report, released last week, showed U.S. factories grew at their fastest rate in 20 months in February.
Mar 2013
  • The Federal Reserve Board has published a report containing summary information on the volume and value, interchange fee revenue, certain debit card issuer costs, and fraud losses related to debit card transactions in 2011.
  • The Board does not plan to propose revisions to the Regulation II interchange fee standard or the fraud-prevention adjustment based on these survey data.
  • The report is the second in a series to be published every two years pursuant to section 920 of the Electronic Fund Transfer Act.
Mar 2013
  • Banks are moving both residential and commercial loans off their balance sheets at a faster pace and at higher prices than at any time since the beginning of the financial crisis.
  • Several major banks including Bank of America, Citigroup, HSBC and Wells Fargo have sold large blocks of nonperforming residential loans since the fourth quarter. SunTrust Banks, Synovus Financial, and Wells are among the sellers of nonperforming commercial loans.
  • Through the first two months of this year, sales of more than $5.2 billion of residential loans and $1.9 billion of commercial loans were announced, a pace that could lead to a 20% to 40% jump in overall sales this year.
  • Rising real estate values, a shrinking inventory, historically low interest rates and an abundance of capital that needs to be deployed by institutional investors are all factors spurring bulk loan sales of both commercial and residential loans.