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Tag Archives: Credit Cards

News Roundup — November 5, 2009 to November 13, 2009

Payments

PayPal officialy launched its new platform entitled “PayPal X” for third party developers on November 5, 2009, making it easier to integrate the payment system with other Web sites and applications.

Continuing fallout from the data security breach suffered by Heartland Payment Systems in January 2009 has indirectly resulted in confirmation by VeriFone that it will terminate technical support relationships with HPS and will instead offer free services to mutual merchant customers.

Expedited CARD Act of 2009

On November 4, 2009, the House of Representatives overwhelmingly approved legislation sponsored by Carolyn Maloney and Barney Frank that would push up the effective date of the Credit CARD Act to immediately upon signing of the bill. The bill passed by a vote of 331-92. The Senate version of the bill, S.1833 (and a companion piece, S.1927) is currently in committee.

Data Security

Consumers who have received data breach notifications within 2008-2009 are at a much greater risk of fraud than typical consumers, according to a new study published by Javelin Research.

TVNZ, a news site in New Zealand, takes a look at the impending phase-out of credit card transactions that utilize signatures, soon to be replaced by chip and PIN-based technology.

A sweeping new bill that would implement a national standard for data protection and breach notification, S. 1490, the Personal Data Privacy and Security Act of 2009, was approved by a vote of 15-5 in the Senate Judiciary Committee. Sponsored by Pat Leahy (D-VT.), the bill would require companies and government agencies to follow a specific ruleset for protecting sensitive and personally identifable data. The bill would also introduce a federal breach-notification standard under which companies would be required to notify not just individuals affected by the breach, but also, in some cases, credit reporting agencies and the U.S. Secret Service. It would also establish a new Office of Federal Identity Protection (within the FTC) and increase penalties for identity theft and related fraud.

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Email This Content Email This Content Posted in News Roundup. Tagged with , , , , , , , , . By Stan Santos - Friday, November 13, 2009

News Roundup — October 26, 2009 to October 30, 2009

Gift Cards

The Consumer Federation of America issued a press release on October 27, 2009 in relation to a survey that demonstrates the depth of consumer misunderstanding when it comes to gift cards. According to the survey results, approximately 33% of a representative sample of slightly over 1,000 adult Americans know how much gift cards cost and only 54% are aware that “six to 12 months after purchase, some of these gift cards charge a monthly fee”. Here is related article in the Washington Post published on October 25, 2009 in relation to the rise of prepaid cards as opposed to traditional bank accounts and credit cards.

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Email This Content Email This Content Posted in News Roundup. Tagged with , , , , , , . By Stan Santos - Friday, October 30, 2009

News Roundup — October 12, 2009 to October 16, 2009

Prepaid Cards

The latest issue of Selling Prepaid E-Magazine is now online. One of the top feature articles in this month’s issue is a story on the National Branded Prepaid Card Association‘s response to FinCEN‘s request for public commentary on input from the prepaid card industry concerning the definition of the term “stored-value”.

According to an economic study released on October 15, 2009, consumers who opt-in regarding network branded prepaid card usage could pay as much as 70% less in fees compared to more traditional checking and debit card accounts, making prepaid cards a far more cost-effective and valuable financial tool for many.

Consumer Financial Protection Agency

Broox Peterson points out a few flaws in the current draft of the CFPA bill, HR 3126, that may have been fixed in the markup that took place during a House Financial Services Committee hearing on October 14, 2009.

Data Security

WIRED finally sheds light on a series of hacker attacks that occurred in 2005 and in 2006 on Wal-Mart.

The White House’s official blog offers this look at what Americans can do to protect their online presence.

Over on ZDNet Australia, Simon Sharwood reports how National Australia Bank is currently contemplating adding another layer of security in order to offer its customers added peace of mind.

In a move that has the potential to make it MUCH more difficult for retailers to defend themselves against civil data breach lawsuits, the judge overseeing the Hannaford data breach case has reversed himself, resulting in the involvement of the Maine Supreme Court.

Rep. Yvette Clarke (D-NY) has urged President Obama to quickly appoint a cybersecurity czar, citing concerns a wide array of online threats against the public and private sectors.

A massive click fraud ring has recently been discovered operating in China that involved 200,000 different IP addresses and racked up more than $3 million worth of fraudulent clicks across 2,000 advertisers in a two-week period. Although the ring has now dissipated (or more likely, been folded into another scam), the danger of such schemes remains.

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Email This Content Email This Content Posted in News Roundup. Tagged with , , , , , . By Stan Santos - Friday, October 16, 2009

News Roundup — September 28, 2009 to October 7, 2009

Consumer Financial Protection Agency

On September 25, 2009, Rep. Barney Frank (D-Mass.) circulated a discussion draft of legislation to create the CFPA. In addition, a hearing of the full House Financial Services Committee was held on September 30, 2009 for the purpose of discussion of the proposed legislation.

The Brookings Institution released the transcript of Martin Neil Baily’s testimony before the Senate Committee on Banking, Housing and Urban Affairs on September 29, 2009. Mr. Baily was the chairman of the Council of Economic Advisers during the Clinton administration during the 1999 to 2001 term. In addition, he was one of three members of the council from 1994 to 1996. You can view his testimony here.

Mr. Baily’s testimony can be summarized as follows: (1) The best framework to guide current reform efforts is an objectivist approach that divides regulation up into micro-prudential, macro-prudential and conduct of business regulation; (2) the quality of regulation must be improved regardless of where it is done; (3) a single federal micro-prudential regulator should be created combining the regulatory and supervisory functions currently carried out at the Federal Reserve, the OCC, the OTS, the SEC and the FDIC; (4) the United States needs effective conduct of business regulation; and (5) the Federal Reserve should be the systemic risk monitor with some additional regulatory power to adjust lending standards.

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Email This Content Email This Content Posted in News Roundup. Tagged with , , , , , , , , , , . By Stan Santos - Wednesday, October 7, 2009

News Roundup — September 9, 2009 to September 18, 2009

Consumer Financial Protection Agency

John Pottow has an opinion piece regarding the proposed CFPA in the Detroit Free Press. He observes that the proposed agency would help small banks relative to big banks because of reduced fixed regulatory costs and would improve the market for simple financial products that are the strong suit of small banks.

Mr. Pottow is an internationally recognized expert in the field of bankruptcy and commercial law. He is a professor of law at the University of Michigan Law School where his area of expertise concentrates on the issues involved in regulation of cross-border insolvencies. In addition, he is a frequent commentator on national and international media outlets such as NPR, CNBC, CNN, C-SPAN and the BBC.

At Reuters, Felix Salmon has the full text of President Obama’s speech at Federal Hall, delivered in New York City on September 14, 2009. His analysis can be viewed here while the Republican rejoinder is here. Over at the Wall Street Journal, Michael Corkery posted a live blog of the proceedings which you can view here.

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Email This Content Email This Content Posted in News Roundup. Tagged with , , , , , , , , , , , . By Stan Santos - Friday, September 18, 2009

News Roundup — August 17, 2009 to August 21, 2009

Heartland Payments Systems

The Department of Justice indicted three individuals on Monday, August 17, 2009, in what it has called the largest case of cybercrime and identity theft ever prosecuted. The three suspects, one American and two unnamed Russian co-conspirators, are allegedly responsible for the data security breach suffered by Heartland Payments Systems in January 2009. The DOJ’s press release is here, the indictment is here and an article from August 2008 (with reference to a similar data breach suffered by the parent company of T.J. Maxx) can be viewed here.

U.S. Supreme Court

The Court has released its calendar of cases for November 2009. Of note is Bilski v. Doll (08-964), a case that could have a broad impact on the prepaid card industry.

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Email This Content Email This Content Posted in News Roundup. Tagged with , , , , , , , , , , , , . By Stan Santos - Tuesday, August 25, 2009

News Roundup — July 6, 2009 to July 10, 2009

Checks and Check Cashing

An article published on FinExtra on July 8, 2009 highlighted a rising trend in fradulent activity. Several members of a New Jersey street gang have recently been arrested by authorities and accused of using laptops and digital cameras with the intention of creating counterfeit checks worth over $650,000 for a period of over two years.

Payments and Interchange

NYCE Payments Network LLC expects to begin testing Internet-based debit transactions by the end of 2009 and to commence offering a commercial service by mid-2010. The service will rely on single-use debit card technology from Verient Inc., a technology company located in San Jose, California.

A sweeping new report from a Canadian Senate committee recommends the federal government create a payment-system oversight board, ban percentage-based debit card interchange for three years, and permit merchants to surcharge for card transactions. Many of the proposals in the report are similar to the issues now working their way through the U.S. Congress.

7-Eleven Inc. has gathered between 1 million and 1.2 million signatures on in-store petitions asking Congress to regulate interchange rates, and expects to have 3 million customer signatures by the time the petition drive ends Aug. 10, according to an interview with a marketing executive with the Dallas-based convenience-store chain.

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Email This Content Email This Content Posted in News Roundup. Tagged with , , , , , , , , . By Stan Santos - Tuesday, July 14, 2009

News Roundup — June 22, 2009 to June 26, 2009

Economic Crisis

Adam Levitin takes a look at Tim Geithner’s comments in the New York Times on the “too big to fail” principle. Do we really want the government to be in the business of guaranteeing Goldman Sachs’ debt and Capital One’s liabilities?

Data Security

A recent Associated Press investigation has found that banks and other financial institutions handling sensitive data are not being nearly as cautious as they could, particularly with respect to credit card and personally identifiable information.

The parent company of retailers T.J. Maxx and Marshall’s will pay approx. $9.75m in a settlement with multiple states relating to a massive data security breach that exposed tens of millions of payment card numbers.

The rapid growth of cybercrime markets is making spam an even more attractive proposition than it has been in the past according to this article on Dark Reading.

Handelsbanken has teamed with EDB Business Partners to enable Norwegian customers the capability to block the use of their cards in certain geographic areas. The regional blocking service, which was made available beginning in June 2009, makes it possible for customers to use their Internet banking account to manage the geographic areas in which they might want their Visa and MasterCard to be valid.

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Email This Content Email This Content Posted in News Roundup. Tagged with , , , , , , , , , , , , . By Stan Santos - Thursday, July 2, 2009

News Roundup — June 15, 2009 to June 19, 2009

Consumer Financial Protection Agency

President Obama announced a series of proposals that would involve the government much more deeply in the private markets, from helping to steer consumers into affordable mortgage loans to imposing new limits on the largest financial companies, in a sweeping effort to prevent the kinds of risk-taking that sparked the economic crisis. More information at the Washington Post and The New York Times.

A fact sheet on the administration’s proposal can be viewed here.

Felix Salmon at Reuters posts his reaction. Arnold Kling at the Library of Economics and Liberty has a reaction posted here. Douglas Eliott at The Brookings Institution comments here. Here is an overview at The Economist. The Center for Economic and Policy Research has a reaction; ditto for The Competitive Enterprise Institute.

Rep. Carolyn Maloney (D-NY) issued this statement with respect to President Obama’s proposal. Mrs. Maloney is the chairperson of the Joint Economic Committee.  Senator Dodd released this statement in his capacity as chair of the Senate Committee on Banking, Housing and Urban Affairs. Finally, Rep. Spencer Bachus (R-AL), the ranking Republican member on the House Financial Services Committee released this rejoinder on the Administration’s reform plan.

Regulatory Reform

An article at American Banker examines how the Obama administration’s proposal for financial industry regulatory reform could result in certain kinds of special purpose banks, such as retailer-owned credit card banks, being eliminated.

Senator Dodd has issued a blistering critique aimed at financial industry groups who have expressed opposition to the Obama administration’s proposal to create an independent consumer financial protection agency.

Meanwhile, WaPo columnist Steven Pearlstein adopts a wait-and-see attitude while Eliot Spitzer, former scourge of Wall Street, thinks the the plan doesn’t go far enough.

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Email This Content Email This Content Posted in News Roundup. Tagged with , , , , , , , , , , , . By Stan Santos - Tuesday, June 23, 2009

News Roundup — June 8, 2009 to June 12, 2009

Credit Cards

Adam Levitin blogs about the overall trend in credit card line reductions and eliminations, some of which is not necessarily attributable to the Credit CARD Act of 2009.

This WaPo article examines how Capital One has decided to restructure itself as a result of the Act.

TheFinanceBuff makes an argument for more standardization of credit card contracts in light of the Credit CARD Act of 2009.

TARP

On Tuesday, June 9, 2009, the Congressional Oversight Panel released a report entitled “Stress Testing and Shoring Up Bank Capital”. The report examines the recent stress tests conducted on America’s 19 largest bank holding companies and makes recommendations as to whether the stress tests should be repeated in the future.

Data Security

A security flaw in the online payment service PayPal means sensitive information is at risk and customers could lose control of their accounts, according to this article at Stuff.co.nz.

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Email This Content Email This Content Posted in News Roundup. Tagged with , , , , , , , , , , . By Stan Santos - Tuesday, June 16, 2009