Nebraska Urges Conferees to Strike Durbin Amendment (May 28, 2010)

May 28, 2010

In advance of the conference committee that will attempt to resolve the differences in the financial reform bills passed by the U.S. House and Senate, a Nebraska state official reached out to the Chairmen and Ranking Republican members of the Senate Banking and House Financial Services Committees, asking them to consider striking Sen. Richard Durbin’s (D-Ill.) interchange amendment from the final version. Nebraska State Treasurer Shane Osborn, speaking for his state and 46 others that distribute various forms of government benefits on network branded prepaid cards, said in a letter that the Durbin amendment “unintentionally undermines prepaid card programs, including government programs that provide aid to vulnerable citizens and save hundreds of millions in taxpayer dollars.” Osborn noted that the revenue that issuers realize from debit interchange enables them to provide the cards to state governments “at little to no cost.” Osborn concluded by asking Rep. Barney Frank (D-Mass.), Rep. Spencer Bachus (R-Ala.), Sen. Christopher Dodd (D-Conn.) and Sen. Richard Shelby (R-Ala.)—all of whom either have been or are likely to be named to the conference committee—to “promote government efficiency, consider state budgets and protect the beneficiaries of government assistance programs” by not including the amendment in the final version of financial reform. Read a copy of Osborn’s letter here.

 

NBPCA: Write Your U.S. Lawmakers on Interchange Amendment (May 28, 2010)

May 28, 2010

Citing the potential adverse effects of Sen. Richard Durbin’s (D-Ill.) interchange amendment to the Senate financial reform bill, the Network Branded Prepaid Card Association (NBPCA) is asking interested parties to reach out to federal lawmakers. The nonprofit trade association has composed a template letter that industry members can personalize and send to their U.S. senators and representatives, emphasizing the impact of the amendment on consumers, businesses and governments that rely on prepaid. The NBPCA Website will automatically send the completed letter to the appropriate legislators. The template can be found at: http://www.capwiz.com/nbpca/home/.

 

Durbin Fires Back at Card Networks, MasterCard Responds (May 28, 2010)

May 28, 2010

Since Sen. Richard Durbin’s interchange amendment was included in the Senate’s financial reform package (Paybefore May 21, 2010), representatives of the financial services industry have responded by arguing that community banks and credit unions, along with consumers, will be the most adversely affected groups. Yesterday, Sen. Durbin sent a letter to the CEOs of Visa and MasterCard, characterizing their arguments as “threats” and threatening the card networks right back by suggesting they are colluding in their efforts to defeat the amendment and could be open to an anti-trust investigation. “It appears that in an effort to frighten small banks and credit unions into opposing the amendment, your companies are threatening to make changes to your small bank interchange fee rates and to your network operating rules,” Durbin wrote. “Further, I warn you that if your companies coordinate with each other or with your largest member banks to make changes to your fees and rules, it would raise serious concerns that you are engaging in an unlawful restraint of trade,” he added. Durbin claims that the limitations on debit interchange called for in his amendment to the Restoring American Financial Stability Act of 2010 will affect only the largest 1 percent of issuing banks in the U.S., referring to the exemption for institutions that have less than $10 billion in assets. But, in a recent Paybefore interview, Terry Maher, partner at Baird Holm LLP, said the carve out for small banks is negated by other parts of the amendment. “The bill allows merchants to surcharge cards and to not accept cards, so the smaller issuers’ cardholders will be subject to fees or refusals if [those issuers] keep a higher interchange fee,” he said. MasterCard Worldwide today responded to Durbin’s letter in a statement: “MasterCard appreciates that Senator Durbin acknowledges that community banks and credit unions oppose his amendment,” the statement said. “This opposition appears to be based on community banks’ and credit unions’ recognition that the Durbin amendment would turn the economics of the entire payment system on its head with negative consequences for all participants, including consumers. Such a result is readily apparent to anyone with knowledge of how the industry works. We believe the community banks and credit unions oppose the Durbin amendment for these reasons and based on their own expertise.”

 

Blackhawk Honors Gift Card Partners with Hawk Awards (May 28, 2010)

May 28, 2010

Third-party prepaid card distributor Blackhawk Network this week announced recipients of its fourth annual Hawk awards, recognizing leaders in the prepaid card industry. The company honors its partners in five categories, with the understanding that innovation in the prepaid card industry is “a key factor” in the success of Blackhawk’s Gift Card Mall. Familiar names took home awards from the Hawk Awards dinner held this year in Phoenix. Amazon.com took the top spot in the Card Design category, while iTunes won for Best Promotional Program. The Home Depot’s interactive gift card experience was named Most Innovative, and Applebee’s Bridget Mohen was honored with Industry Achievement Award for making the greatest contribution to the advancement of the gift card industry. The Best Overall Gift Card Program went to grocery chain Giant Eagle and the Best Marketing and Promotional Program went to national supermarket chain Kroger.

 

Visa, Monitise Form Mobile Financial Services JV in India (May 28, 2010)

May 28, 2010

Visa Inc. and Monitise plc announced they have formed a joint venture that will enable financial institutions in India to offer consumers an array of mobile financial services. The JV is an extension of the partnership between the two companies—which included Visa acquiring a 14.4 percent stake in Monitise—to develop mobile capabilities around financial services that was announced last year (Paybefore July 1, 2009). In India, the companies will provide a technology platform that will enable financial services providers to offer consumers payment and banking services from their mobile devices including account management, bill pay, mass-transit ticketing and mobile top-up. “Creating this joint venture is a crucial step that can help expand the acceptance of digital currency in India and enable the migration of $700 billion of annual consumer spending from cash to electronic forms of payments,” said Elizabeth Buse, group executive, International, Visa Inc. “Together, Visa and Monitise can provide banks and mobile network operators in India the scale, security, and reliability required to make mobile money a reality for consumers.” The transaction creating the joint venture is expected to close in June 2010, subject to applicable local laws. A name for the new company has not been publicly released, a Visa spokesperson says.