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Posted: Oct 11, 2018
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Author: Lou Grilli

US Bank becomes the first financial institution subject to OCC supervision to offer “deposit advance products” a.k.a. Payday Loans. Should credit unions step up to help the community?

U.S. Bank, the country’s largest regional bank, began taking advantage of a roll-back of OCC regulations that prohibited banks from offering deposit advance products. According to the LA Times, a U.S. Bank customer with a checking account open for more than 6 months, and a direct deposited paycheck can apply online and if approved, be granted a loan of between $100 and $1,000, within minutes. Repayment, which must be within three months, comes with an interest rate of $12 per $100 borrowed, which calculates to nearly a 71% annualized interest rate. U.S. Bank is just the first of what is expected to be a wave of banks providing competition to payday lenders. What changed to bring this on?

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Posted: Oct 3, 2018
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Author: Lou Grilli

The stakes are high - $90 billion in fees paid collectively by merchants each year, according to Bloomberg. The proposed class action settlement amount is record-breaking - $6.2 billion, the most significant dollar amount ever, to be paid to 12 million merchants who do not opt-out of the settlement.

What does this mean for the future of interchange fees? It’s still murky, at best.

A lawsuit that was being argued since 2005 was finally settled on September 18, 2018, some 13 years later. The class action was initially filed by the National Retail Federation, the Retail Industry Leaders Association, and the National Association of Convenience Stores, collectively representing about 12 million merchants in the U.S. It named Visa, Mastercard, and several large issuers, including JPMorgan Chase & Co., Citigroup Inc. and Bank of America Corp. as Defendants. The suit accuses the defendants of conspiring to fix interchange fees that businesses pay to process credit and debit cards. A previous settlement had been reached in 2012 but was thrown out by the courts. This time around, the settlement, which still needs to be approved by the courts, leaves open several unanswered issues.

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Posted: Sep 26, 2018
Categories: Consulting
Comments: 0
Author: Randy Daigle

[Editor’s Note: This article was previously published on CUInsight, and has been modified.]

As the web of vendors to credit unions becomes more complex – core vendors, digital banking vendors, credit/debit card processors, Loan Origination System (LOS) providers, IT vendors, consultants, loyalty programs, legal services, and the list goes on – vendor management has become a necessary core competency. However, most credit unions don’t have the time, resources and/or expertise to manage their vendors properly. At many credit unions, the problem goes much deeper. With no contract life-cycle management in place, auto-renew contracts continue, sometimes in perpetuity. There is a lack of awareness of the risks of not managing vendor contracts. 

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Posted: Sep 19, 2018
Categories: Credit Cards, Marketing
Comments: 0

[Editor’s Note: This article was previously published in the CU Today, and has been modified.]


It’s no surprise that card issuers are pursuing the affluent consumer with their credit card offerings. These cardholders generally contribute 60% more spend than non-affluent cardholders and their monthly spend is 3.6X greater than cardholders with traditional credit cards. Therefore, these consumers are spending and transacting more frequently, which equates to higher revenue for the issuer.

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Posted: Sep 12, 2018
Comments: 0
Author: Lou Grilli

Debit Push Payments Will Revolutionize Getting Paid, Instantly

[Editor’s Note: This article was previously published in the Payments Journal, and has been modified]

Using a debit card to pay a merchant, in a store or online, is standardized and intuitive. But getting paid is neither. Receiving and depositing a check, getting the money “Venmo’d” to you, by ACH (including direct deposits), and of course, cash, are all options. These options require the payee to wait - until they receive the check, wait until the ACH clears or wait until the Venmo payment can be pushed to a bank account. There is an alternative: debit push payments. The “rails” that debit transactions use to make a purchase from a merchant can be used in the reverse direction, that is, the same rails can be used to push a payment to the debit cardholder’s account, pretty much instantly. Visa calls the capability “Visa Direct” and Mastercard calls it “Mastercard Send”. Both work the same; to allow funds to be pushed by a financial institution or a business to a cardholder knowing only the debit card number; no more having to provide the credit union’s routing number and checking or saving account number.

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