January 10, 2008

Interview With GMAC's Don Ferguson
Black Enterprise (01/08)

General Motors Acceptance Corp. director of advertising and relationship marketing Don Ferguson, whose company is a member of the American Financial Services Association, continues to raise consumer awareness regarding periodic checks of credit reports through SmartEdge seminars. Ferguson says he is amazed by the number of people unaware that they should check their credit reports yearly. Ferguson urges consumers to check reports for mistakes and to report them to reporting agencies and creditors as soon as they are uncovered, because most mistakes can be corrected. Consumers should also be wary of fraud and identity theft, which have become more prevalent over the years.
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S&P Sees Holiday Lift From Gift Products
American Banker (01/07/08) Vol. 173, No. 4, P. 7; Wade, Will

Standard & Poor's (S&P) says figures from 2007 holiday sales may improve after gift card sales are added. Retailers expect about 25 percent of gift cards to be redeemed a week after Christmas, and another two-thirds will be cashed in by the end of January. "While lackluster holiday sales this season have led to the belief that it could be the worst in five years, we believe that all hope is not lost, and gift cards could provide a silver lining," says S&P analyst Mark Basham.
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Poll: Paying Down Debt Lower Priority
American Banker (01/04/08) P. 5; Wolfe, Daniel

A report issued by TransUnion indicates that consumers' level of interest in paying down debt has flagged between this year and last year, with 17 percent of respondents listing paying down debt as their top resolution for 2008, versus 22 percent in 2007. The report also found that finances are of greater concern to younger people than older people. Nineteen percent of respondents age 35 to 49 said making their mortgage payments was a concern to them, compared to 14 percent of all consumers polled. One in four respondents failed to make the deadline for at least one bill last year, according to the study. Their salary or making nonmortgage bill payments constituted respondents' biggest financial concerns for 2008. "The drop in priority for paying down debt may be an indication that more consumers are struggling today just to maintain their financial status quo," stated TransUnion's Lucy Duni.
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Industries Want U.S. to Eliminate Credit-Card Interchange Fees
Munster Times (IN) (01/04/08) Holecek, Andrea

The European Commission's ban on MasterCard's credit card interchange fees in December and its directive that those fees be eliminated within six months has spurred industry momentum to have such fees outlawed in the United States, where they average 2.14 percent of a transaction. "Most people suspect that the [EC] ruling will have an effect in the legal battles going on here," says the Food Marketing Institute's Kathleen Thomas. Over $36.3 billion in interchange fees were levied in the United States in 2006, and in 2007 those fees could exceed $40 billion. Hearings on interchange fees are being held by congressional panels such as the U.S. Senate Judiciary Committee, the Senate Banking Committee, the Senate Permanent Subcommittee on Investigations, and the House Judiciary Committee Antitrust Task Force. "We're waiting for Congress to proceed further," Thomas says. Almost 30 associations, representing a wide swath of businesses that accept debit and credit cards, have organized into the Merchants Payments Coalition, a group that is opposed to current interchange fees and their manner of application. Coalition Chairman and National Retail Federation general counsel Mallory Duncan says congressional focus on the issue is starting to draw insights on a "broken system."
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Treasury Plans Social Security Debit Card
Wall Street Journal (01/04/08) P. A4; Laise, Eleanor

The Treasury Department is ready to introduce the Direct Express debit card, a prepaid debit card for Social Security and Supplemental Security Income recipients who do not have a bank account. The card is a component of a broader Treasury initiative to migrate to electronic payments. "We've been working for a while to try to understand the needs of the unbanked," says Treasury's Judith Tillman. "Combine that with problems we've seen with financial crimes and identity theft, problems with forged checks and stolen checks and so on--the debit card seemed like the right answer." Comerica Bank will serve as the card's issuer, and the card will debut in a handful of states in the spring and be rolled out nationwide by the end of the summer. Cardholders would have faster access to their money and avoid stolen checks and other security problems, while Treasury and banking experts say the product could yield substantial cost savings for beneficiaries and the federal government. Social Security retirement, disability and survivor benefits, and SSI benefits will be automatically loaded onto the card account on the designated payment day for beneficiaries who sign up for the debit card, which can be utilized at bank branches, retail sites, ATMs, and online. Cardholder fees, interchange fees when cardholders employ the card at the point of sale, and the float on funds sitting in cardholders' accounts will earn money for Comerica.
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