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News Scan Nov 2011

Credit Card News, Economy News, Banking Industry News - Nov 2011
Nov 2011
  • MasterCard and Western Union have been working together to provide prepaid card services for the past year.
  • The expanded global relationship makes MasterCard the preferred brand for Western Union-sponsored prepaid programs around the world and makes Western Union the preferred money transfer service for MasterCard.
  • Consumers will have access to a global network to transfer and load funds onto prepaid cards.
  • Western Union and MasterCard prepaid cardholders will be able to reload their prepaid cards at MasterCard rePower locations as well as at participating Western Union Agent locations.
Nov 2011

Home Sales Up 1.3 Percent in October

Source: NPR Category: Category: Economy News
  • Americans bought slightly more new homes in October, a hopeful sign for the troubled housing market.
  • But the median sales price fell to its lowest level of the year, and the overall sale pace is trailing last year's — the worst in half a century.
  • TNew-home sales increased 1.3 percent last month to a seasonally adjusted annual rate of 307,000.
  • That's less than half the 700,000 that economists say must be sold to sustain a healthy housing market.
Nov 2011
  • Banks may be on shaky ground, but 43% of Americans see them as a trusted source for retirement advice.
  • With 48% of Bank of America's customers relying on it as their primary source for retirement advice, up dramatically from 27% in 2010.
  • The bank's relaunch of its retirement income calculator in Q410 was well done, positively reflecting recent changes in consumer attitudes to retirement.
  • Other big gainers were Citibank, Morgan Stanley Smith Barney, JPMorgan Chase, Merrill Lynch, Charles Schwab, Edward Jones, Scottrade, UBS and ING Direct.
  • In terms of where customers invest the majority of their retirement assets, Fidelity retains its leadership position, with 8% of investors selecting Fidelity as their primary retirement investment source — but this is down from 11% in 2010.
Nov 2011

Home Sales Rise but Cancellations Also Up

Source: NPR Category: Economy News
  • Sales of previously occupied homes rose slightly last month but remained at depressed levels. And more deals are being canceled at the last minute, a sign that even those who are looking to buy are worried about the housing market.
  • Home sales rose 1.4 percent last month to a seasonally adjusted annual rate of 4.97 million, the National Association of Realtors.
  • That's below the 6 million that economists say is consistent with a healthy housing market and slightly ahead of last year's sales the worst in 13 years.
  • Many deals are falling apart before that point. One third of Realtors say they've had at least one contract scuttled in October, up from 18 percent in September.
Nov 2011
  • U.S. companies borrowed more to spend on equipment in October than a year ago and their credit standing improved, driving up a key gauge of business activity.
  • Businesses originated $6 billion in loans, leases and lines of credit in October, up 22 percent from a year earlier, though down 16 percent from September.
  • The monthly volume drop was due more to a typical strong end of the third quarter than to a slowing in demand for lease financing.
  • However, the uneven path to recovery in the industry reflects the erratic global economy.
Nov 2011
  • The Federal Deposit Insurance Corp. or FDIC announced the shuttering of two banks, one each in Iowa and Louisiana, taking the count of U.S. bank closures in 2011 to 90.
  • Johnston, Iowa-based Polk County Bank was closed by the Iowa Division of Banking. As of September 30, 2011, Polk County Bank had about $91.6 million in total assets and $82.0 million in total deposits.
  • Lacombe, Louisiana-based Central Progressive Bank was closed by the Louisiana Office of Financial Institutions. As of September 30, 2011, Central Progressive Bank had about $383.1 million in total assets and $347.7 million in total deposits.
  • Grinnell, Iowa-based Grinnell State Bank assumed the banking operations, including all the deposits, of Polk County Bank from FDIC, and New Orleans, Louisiana-based First NBC Bank assumed from the FDIC all of the deposits of Central Progressive Bank.
Nov 2011
  • Industrial production rebounded 0.7 percent last month, the Federal Reserve said on Wednesday, after slipping 0.1 percent in September. October's increase was the largest since July.
  • Manufacturing expanded 0.5 percent after rising 0.3 percent in September. The gain reflected a 3.1 percent jump in the production of motor vehicles and parts.
  • Mining output surged 2.3 percent, more than reversing September's 0.5 percent drop. Utilities fell 0.1 percent, declining for a third straight month.
  • Capacity utilization, a measure of how fully firms are using their resources, rose to 77.8 percent from 77.3 percent in September.
  • That was 2.1 percentage points above its level from a year earlier, but 2.6 percentage points below the 1972-to-2010 average.
Nov 2011

US employment, growth woes seen into 2013

Source: nypost Category: Economy News
  • Slow growth and high unemployment in the US is expected to persist until 2013.
  • GDP is expected to grow at 2.6 percent this quarter, but that pace is seen edging lower to 2.4 percent next year before picking up slightly to 2.7 percent in 2013.
  • The scarcity of jobs that has kept the national unemployment rate hovering around nine percent will not see much relief any time soon.
Nov 2011

Finance Companies Beat Banks, CUs in Auto Loans

Source: cutimes Category: Banking Industry News
  • Lending from auto finance companies has increased by more than 47% since 2009.
  • 854,800 loans were originated from auto finance companies in July 2011 compared to 581,300 in July 2009.
  • Credit unions and banks originated 820,200 loans in July 2011 compared to 832,000 for July 2009, which amounts to a decrease of less than 2%.
  • 38.5% of all auto loan originations from subprime borrowers now come from auto finance companies. The figure is 17.6% for credit unions and banks
Nov 2011

Banks Begin Rolling Out Services for the Poor

Source: chexar Category: Banking Industry News
  • As banks struggle to find new sources of profits, some are starting to notice the poor customers they have long ignored.
  • Banks have generally neglected low-income consumers, seeing little profit in trying to attract business from poor people who live paycheck to paycheck.
  • But now, as banks explore all options to boost their bottom lines, some are more willing to consider selling the alternative financial products these customers use.
  • Now banks including Wells Fargo & Co., KeyCorp and U.S. Bancorp are increasingly trying to appeal to customers that their industry has largely ignored.
  • Regions Financial Corp. has expanded its check-cashing services at some branches, and has also started selling reloadable prepaid cards, money transfers, and walk-in bill payment services.
Nov 2011

Consumer credit use up in September: Fed

Source: Reuters Category: Banking Industry News
  • Consumer credit grew by $7.39 billion in September after falling a revised $9.68 billion in August, boosted by a category that includes student and new-car loans.
  • Revolving credit, which mostly measures credit-card use, fell $627.1 million -- a third straight monthly decline after drops of $2.26 billion in August and $3.40 billion in July.
  • Nonrevolving credit, which includes auto loans, raised $8.01 billion in September after a revised $7.42 billion decrease in August.
Nov 2011
  • Discover Financial Services said that it's dropping the Foreign Currency Fee on its cards.
  • Company said it will no longer charge the 2 percent fee. Foreign transaction fees usually help banks increase revenue.
  • Discover's decision to drop the tax comes at a time when its customers are increasingly sensitive to bank fees, a spokeswoman said in an email.
Nov 2011

U.S. closes two more banks, 87 so far in 2011

Source: Reuters Category: Banking Industry News
  • The Federal Deposit Insurance Corporation (FDIC) said the SunFirst Bank of Saint George, Utah, has been closed. It said the three branches of SunFirst Bank will reopen as branches of Cache Valley Bank.
  • SunFirst Bank had about $198.1 million in total assets and $169.1 million in total deposits as of September 30, 2011.
  • The FDIC also said that Mid City Bank, Inc in Omaha, Nebraska, was shuttered, with the deposits being assumed by Purdum State Bank in Purdum, Nebraska.
Nov 2011
  • New U.S. claims for unemployment benefits fell below 400,000 last week for the first time in five weeks and a trend reading also edged lower.
  • Suggesting a modest improvement in the still-moribund labor market.U.S. Non-farm productivity rises 3.1 pct in Q3.
Nov 2011
  • The number of new credit cards issued by lenders during the month of September rose considerably on a year-over-year basis.
  • At the same time, the amount consumers were allowed to borrow rose as well.
  • This may be because the rates of both delinquency and defaults have fallen considerably for all major financial institutions over the last year.
Nov 2011
  • The list of banks backing away from charging customers debit card use fees has grown amid continued public outcry and a campaign urging customers to switch banks in protest of the fees.
  • Wells Fargo abruptly yanked the $3 monthly debit card use fee it began testing just two weeks ago in five states.
  • SunTrust Bank, which launched a $3 debit card fee for "Everyday Checking" account holders in June 2011, issued a statement rescinding the fee.
  • Regions Bank joined in on Monday, announcing the end to its debit card fee and a rebate of fees paid.
  • BofA's major competitors -- Chase, Citi and PNC -- all said last week they would not charge debit card fees.