A coalition of consumer advocacy groups led by The National Consumer Law Center wants the Comptroller of the Currency to shut down a payday loan program facilitated with prepaid cards. The program instituted by payday lender Community Choice Financial Inc., managed by Insight Card Services LLC and with prepaid cards issued by Urban Trust Bank, evades state usury and payday loan laws, according to the coalition.
Community Choice Financial subsidiary CheckSmart Inc. is reportedly using Insight prepaid cards to provide payday loans in Arizona and Ohio, where the usury limit is 36 percent and 28 percent respectively. "Yet for a 14-day, $300 loan, the annual rate for CheckSmart's line of credit is 401 percent and the overdraft loan is 390 percent," the coalition said in a letter to the OCC.
"Prepaid cards and payday loans just don't mix," added Lauren Saunders, Managing Attorney at the National Consumer Law Center. "Prepaid cards should be safe alternatives to bank accounts, not vehicles for evading state law with predatory loans that trap people, often those with the least means, in a spiral of debt."
The letter can be accessed at www.nclc.org/images/pdf/high_cost_small_loans/letter-checksmart-occ.pdf.
Near field communication (NFC) technology application developer Skycore LLC entered a pilot that utilizes its codeREADr app for smart phones along with wristbands embedded with NFC technology. Users of Google Inc. Android smart phones can reload value on the wristbands via the mobile app.
The wristbands allow users to attend multiple events at the same venue, or participating venues, without having to be issued new tickets. Users tap smart phones on the wristbands. The codeREADr app on the smart phone communicates with the NFC chip in the wristband to read transaction data. The app then validates the data in real-time against a database typically maintained by a ticketing company.
The Democratic National Committee returned $50,000 in Wal-Mart Stores Inc. gift cards to the big-box retailer, according to media reports. The cards, which Wal-Mart gave to the DNC as an in-kind contribution, were reportedly being returned by the DNC as a favor to labor unions. Some labor unions are critical of Wal-Mart, since the retailer does not employ unionized workers in its U.S. operations.
The Center for Financial Services Innovation issued Compass Principles: Guiding Excellence in Financial Services, a white paper that contains ethical guidelines for financial services companies. By using the Compass Principles, service providers can be profitable while at the same time help customers make good financial decisions in the short and long terms, the CFSI said.
Mercator Advisory Group's research report Measuring Reload: ACH, Cards, Cash, and Checks provides analysis of the current prepaid reload landscape and makes the case that cardholders who reload prepaid accounts represent loyal and cost-effective prepaid card customers.
Following its partnership with U.S. Bank, online gift card exchange operator Plastic Jungle Inc. extended its gift card to loyalty point and award mile exchange program to its other partners. The company said the move is part of its goal of making monetary conversion channels interchangeable.
Plastyc Inc. made a mobile banking app available to its UPside Visa cardholders via Amazon Inc.'s Kindle Fire tablet computers. The app, commissioned by Plastyc from custom software development firm DataArt Solutions Inc. and downloadable to the tablet via Amazon.com, allows cardholders to activate new accounts, sign up for direct deposit, redeem cash-back points, pay bills, transfer funds, issue paper checks, and check balances and transaction histories.
PrepaYd Inc., the parent company of calling card provider PrepaYd Wireless, received approval from the U.S. Patent and Trademark Office for the name and design of its word mark "PrepaYd." Bruce Berman, Chief Executive Officer at PrepaYd, said the name is the marketing cornerstone of its business.
Money transfer specialist The Western Union Co. opened its 500,000th agent location, in New York City. Western Union commemorated the occasion by committing $500,000 to fund economic development and entrepreneurship programs in New York City and internationally over the next five years.
Wolfe LLC, the parent company of gift card provider GiftCards.com, achieved compliancy with the Payment Card Industry Data Security Standard as a Level 1 service provider. Wolfe said the certification confirms the company's commitment to security in its card personalization and payment processing services.
Mobile money facilitator Obopay collaborated with Visa Inc. on an electronic funds disbursement solution for corporations. The service allows for the loading of Visa-branded prepaid cards from corporate accounts. The solution is designed for the disbursement of insurance, payroll, rebates, incentives, business expenses, government benefits and other bulk payments.
Gift and loyalty card program manager TenderCard integrated its services into the mobile payment gateway operated by RedFin Network Inc. The partnership allows TenderCard's ISOs access to Redfin network's sales channels.
Telecommunication provider T-Mobile USA Inc. and mobile payment processor Vesta Corp. teamed for the T-Mobile Refill application that allows T-Mobile prepaid phone customers to reload mobile phone services. The app is available for smart phones that run on Google Inc.'s Android operating system. Phone users are given the option of enrolling in one-time refills or auto refills via prepaid phone cards.
Hong Kong-based remittance provider Transact24 Ltd., in conjunction with Gibraltar-based prepaid card issuer Transact Network Ltd., launched the T24 PayVault Visa Prepaid Card. The payroll card caters to European companies that are required to pay employees in U.S. dollars.
Corporate and prepaid fleet card provider Wright Express Corp. expanded its presence in Europe with the purchase of U.K.-based corporate travel card company CorporatePay Ltd. for approximately GBP 17 million (about $27.5 million) in cash, with potential earn-outs of GBP 5.5 million based on performance milestones.
Rev Worldwide, a financial services firm for financially underserved markets, named three executives to its leadership team. Former GE Capital executive Mauricio Benavides became the company's CEO of Latin America. Daryn Griggs, formerly an executive at Visa, joined Rev Worldwide as CEO of the Asia Pacific Region. And former Dell Executive Director David Clifton takes on the position of Senior Vice President of Global Merchant Services.
Chris Martin, Executive Vice President of Global Operations at Obopay, as well as Chief Compliance Officer at the company, added General Manager for North America to his titles. In his new role, Martin will head business development and provide financial oversight for the mobile money manger. Martin joined Obopay in 2007, having come from his job as Director of Finance and Treasury at Yahoo!
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