"A recent study of 4,000 consumers by Visa, U.S.A. found that consumers are not dedicated to any particular payment method, and tend to switch between plastic, checks and cash."

staten johnson

Michael E. Staten

Robert W. Johnson
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afsaonline

JULY 2004   

Credit Unions Are Selling Card Portfolios
   

Banks complain that credit unions do everything that banks do, but receive the benefit of freedom from corporate income taxation—a benefit banks clearly do not share. However, in at least one important category of consumer financial services, credit unions are ceding their business to banks. Many credit unions are recognizing that they can't invest the resources necessary to make their card product competitive in today's market, and are selling their credit card portfolios.

Delinquency Rates Improve
The American Bankers Association (ABA) reported that for the first quarter of 2004, its seasonally-adjusted composite index of delinquency for eight types of closed-end consumer loans declined 1.6 percent from the fourth quarter of 2003. As of the end of March 2004, 1.86 percent of accounts in the composite index were 30 or more days past due.

Personal Bankruptcies Improved from a Year Ago
Consistent with the continuing signs of a strengthening economy, personal bankruptcy filing rates in the U.S. remain somewhat below the levels a year ago.

Credit Unions Are Selling Card Portfolios
Banks complain that credit unions do everything that banks do, but receive the benefit of freedom from corporate income taxation—a benefit banks clearly do not share. However, in at least one important category of consumer financial services, credit unions are ceding their business to banks.

Online Banking Popularity Soars
Back in 1996, online banking was in its infancy. According to research by TowerGroup, about 2.4 million U.S. households that year indicated that they had tried online banking. Just seven years later, by the end of 2003, nearly one-third of all U.S. households (29.3 million) had signed up for online banking.

Cardholders Still Use Cash And Checks
Despite the saturation of the U.S. credit card market and the rapid rise in the number of debit cards in circulation, plastic is still not the preferred means of payment by U.S. consumers. A recent study of 4,000 consumers by Visa, U.S.A found that consumers are not dedicated to any particular payment method, and tend to switch between plastic, checks and cash.

Trends in Credit Card Lending Activity
Issued in June, the Federal Reserve Board's fourteenth annual report about the profitability of credit card operations of depository institutions reveals that banks dedicated to the issuance and servicing of credit card accounts consistently enjoy higher returns than those involved in all commercial bank activities.

GMAC Supports Counseling to Prevent Foreclosures
An initiative to offer free credit counseling to financially troubled mortgage borrowers that GMAC started two years ago is about to expand.

Amendment to New Jersey's Predatory Lending Law
On July 6, New Jersey Governor James McGreevey signed Senate Bill No. 279/Assembly Bill 2911 amending the state's predatory lending law. The New Jersey Home Ownership Security Act of 2002 which was signed into law on May 1, 2003 and became effective November 27, 2003 was revised in several ways.

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