October 18, 2007

GMAC Honored for Economic Development in Detroit
GMAC Financial Services News Release (10/16/07)

The 100 Black Men of Greater Detroit has honored GMAC Financial Services and its SmartEdge financial education program with its Excellence Award for Economic Development. The group recognized SmartEdge for its efforts to improve financial education, including promoting the awareness of financial options, personal credit, and good financial habits. GMAC plans to hold at least 15 SmartEdge seminars in the Detroit area this year, and 750 to 1,000 people are likely to attend the events. People who are unable to attend a seminar will be able to find SmartEdge tutorials online. A $10,000 SmartEdge book allowance will also be used to create 20 $500 book scholarships for local students. GMAC expects to draw more than a million people to its 2,000 SmartEdge events across the country this year. "SmartEdge is more than a job for me; it is truly about giving back to Detroit and the hundreds of other communities around the country where GMAC reaches out through the SmartEdge program," says Don Ferguson, GMAC director of Minority Dealer Development. "SmartEdge can empower individuals, families, and communities to make more informed financial decisions."
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Nissan's Financial Services Company Awarded for Leadership in eLeasing
The Lessors Network (10/16/07)

At the 2007 Auto Finance Summit Awards in Las Vegas, Nissan Motor Acceptance Corp. (NMAC) was recognized for spearheading the push toward eLeasing. With eLeasing, customers benefit from being able to quickly complete electronic contracts with minimal chances of error. Dealers, meanwhile, reap the benefits of enhanced cash flow and customer service, fewer contracts in transit, and reduced compliance issues. NMAC has been involved in eLeasing in five states for the past three months, with seven additional states to be added to its efforts by year's end. Retail contracts have been handled electronically by the company for more than three years. NMAC Vice President of Operations Jeff Edwards noted, "Even though eLeasing has been a big challenge from the start, its value to NMAC and to our dealers has been evident from the very beginning." Industry leaders nominated the company for the award, and the Auto Finance Summit Board of Advisors and Auto Finance News editors selected the winners.
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DaimlerChrysler Financial Services Rated Number One by Retailers
Easier.com (10/12/07)

The most recent Sewells Information and Research survey ranked DaimlerChrysler Financial Services as the number one automotive finance provider in the industry. The number one finish is the result of 88 percent of customers ranking their experience with the company as "good" or "very good." The survey results are great news for DaimlerChrysler, because the company has been hard at work for the last five years to develop better customer satisfaction and service. The survey indicated that finance companies owned by manufacturers "are really delivering in response to competition from independent finance companies on one side and direct lenders on the other."
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Mailed Card Offers Seen Slackening
American Banker (10/15/07) P. 8; Wade, Will

Research by the New York-based marketing company Synovate shows that this year financial services companies mailed only 5.3 billion credit card offers--8 percent less than in 2006. Furthermore, the number of hard-copy mail-in offers from financial services companies has decreased since JPMorgan Chase and Capital One Financial have started focusing more resources on Internet and television marketing campaigns. Bank of America's buyout last year of MBNA Corp. also affected the falling figures; MBNA was a heavy user of direct mail promotion.
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Report: Debit Card Outlook Bright, But Banks Failing on Activation
Digital Transactions (10/15/07)

According to a report from TowerGroup, debit cards continue to lead all other payment devices in terms of growth, and are expected to weather a potential economic slump better than credit cards. However, the report also found that consumers activate and use only slightly more than half of the debit cards issued by financial institutions. Banks and credit unions must blame themselves for the low activation rate, as debit cards are often distributed without instructions, says Brian Riley of TowerGroup. As a result, consumers do not know how to make use of debit cards, and many business owners still think checks yield a payment trail that is easier to track. Other findings from the report are more positive; those who do utilize debit cards are apt to use them frequently, and the average consumer possesses 1.1 debit cards. Government payments are increasingly being shifted into debit card-linked accounts, as well. Using data from Bank of America and the Federal Reserve, TowerGroup approximates that the annual growth rate for PIN-based debit card transactions was 18 percent between 2005 and 2007, compared to 5 percent for credit cards. In addition, TowerGroup anticipates that the current growth rates for debit cards will persist for at least two years, now that the system is engrained in consumers' spending habits, whereas credit card transaction growth is expected to be almost flat through 2009. And, if the economy declines, the resulting consumer credit crunch may also favor debit card use.
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Schwarzenegger Vetoes Data-Breach Bill
Security Focus (10/15/07) Lemos, Robert

California Gov. Arnold Schwarzenegger has rejected legislation that would have stopped companies from storing sensitive payment data that is not needed for business reasons. The bill also delineated what information firms would be required to divulge when informing customers of a breach. Schwarzenegger explained that the standards would be too burdensome for companies, particularly small companies, to adopt. The legislation was proposed by the California Credit Union League, whose members issue credit cards. Indeed, financial establishments lose a substantial amount of money from data breaches, as they must replace credit cards and debit cards even if the breach was not their fault. Meanwhile, retailers continue to oppose the push to safeguard their data.
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