Merchants: Bitcoin is a Hassle Posted by AVCU on 4:35 PM

As follow-up to our the coverage last week about virtual currency Bitcoin being featured on CBS' The Good Wife, American Banker sought the real life opinion of merchants. They found that one scene from the TV series rang particularly true. "We’re not going to do much more with Bitcoin,” a fictional hotel manager says. “I thought it would be cool, but it is a bit of a hassle.”

The fictional hotel manager appears to be based on one of Bitcoin’s real-life poster boys: Jefferson Kim, who manages a Howard Johnson Hotel in Fullerton, CA, who was quoted in an October issue of The New Yorker expressing his fascination with the decentralized, peer-to-peer currency. American Banker tracked down Kim who told them that the only Bitcoin transaction he handled was the one that the New Yorker writer insisted on using to pay for his stay at the Howard Johnson. Kim says it was a big hassle, and it goes like this:

The reporter transfers regular cash to one of the Bitcoin exchanges. He then transfers the Bitcoins to Kim, who in turn exchanges them once back into dollars in order to transfer them to the hotel’s deposit account. The hotel manager would have preferred a credit card.

Bitcoin replaces currency and is an encrypted computer file whose movements from person to person can be tracked publicly without naming the spender or recipient. Merchants don't pay interchange to a bank. There are few reports, however, of Bitcoin actually being used to pay for items. That makes Bitcoin more of a commodity as it is traded and held. About 200,000 Bitcoins are traded daily, which equals about $1 million.

See the American Banker original article here.

Another Swipe Fee Battle? Posted by AVCU on 11:00 AM

Another interchange fee fight in the offing. This time over credit card, and in the courts instead of in Congress. According to MoneyLand and CNBC, analysts who cover the financial sector have expressed worry that on-going litigation involving several major banks could lead to a cap of 0.5% on credit interchange fees — one-fourth of what’s currently charged — potentially dragging down bank earnings. If that happens, consumers who are used to generous credit card rewards programs complete with double miles, accelerated earnings, and big sign-up bonuses might get a rude awakening.

The plaintiffs, which include Payless ShoeSource, the National Association of Convenience Stores, and the National Restaurant Association, among many others, argue that Visa, MasterCard and 13 large banks have illegally colluded to charge fees for credit card transactions that are far higher than an open, competitive market would dictate they should be. Estimates of the potential cost of a settlement of the antitrust case vary dramatically — from a few billion dollars into the hundreds of billions.

Read the CNBC coverage here.

Health & Benefit Insurance for CU Small Biz Members Posted by AVCU on 12:36 PM

The Association's partnership with CUNA Strategic Services makes available to Vermont credit unions The Small Business Authority (by Newtek Business Services) to provide health and benefit insurance products to  small business members of Association affiliated credit unions. Through AVCU's partnership, credit unions can provide small business members with:

• group health
• group life
• group accidental death and dismemberment (AD&D)
• group short-term disability (STD)
• group long-term disability (LTD)
• group dental
• group vision, and 
• individual and family health.

View more details about the coverages and how to get started here.

PayPal Expands Home Depot Pilot, Adds Card Posted by AVCU on 4:18 PM

As a follow up to our report last week on Payal's payments system trial in select Home Depot stores, the online payments provider now expects to be in all Home Depot stores by March. A PayPal spokesperson says that they need to reach scale very quickly, otherwise it's payment system won't catch on as a merchant payment option.

Bank Technology News is reporting that PayPal will also offer consumers a card linked to their PayPal accounts. The card will be made available online. The Home Depot point of sale trial can be used with or without a card. If consumers choose not to use a card, they make PayPal payments at the point of sale using a phone number and PIN.

PayPal Home Depot pilot began with five stores. This week, it expanded to 51 stores on its way to nationwide coverage in March.

According to Bank Technology News, the new card will not function like a normal debit card. It will not have the user's name or account number printed on it. Instead, it will have encrypted data written to the magnetic stripe, used to provide access to funds via a link to PayPal. The card will have a rewards feature added by yearend.

Is A ".CreditUnion" Domain on the Horizon? Posted by AVCU on 10:15 AM

Credit unions have an opportunity to acquire a credit union specific domain name. ICANN, the organization that oversees top-level Internet domain names is now allowing organizations to apply for their own custom Internet domain names. CUNA is assessing credit union interest in obtaining the ".creditunion" domain name. to do so, credit unions are being asked to participate in a very brief 3-question survey. If obtained, the ".creditunion" domain would be available to credit unions at an estimated cost of $100-$200 per year. Doing so could provide additional brand recognition by enhancing the uniqueness of the credit union identity.  Reportedly, the banking sector is pursuing the ".bank" top level domain.

Click here to participate in the survey.

NCUA Webinar: CFPB Director Cordray & NCUA Chair Matz Posted by AVCU on 5:56 PM

NCUA Board Chair Debbie Matz will host a free webinar with Richard Cordray, the Obama appointed director of the Consumer Financial Protection Bureau (CFPB), on Wednesday, Feb. 8, at 3 p.m. EST. The webinar will review the CFPB’s regulatory priorities, and how they will affect credit unions. Separately, Matz will provide an  update on NCUA’s Regulatory Modernization Initiative, corporate credit union resolution, and other current topics. During the live webinar, participants will be able to type in questions about any topic relating to the credit union industry or the CFPB. The webinar will be archived on NCUA’s website approximately two weeks after the event.

For more details and to register click here.

PayPal in Pact w/Home Depot for Point of Sale Pilot Posted by AVCU on 10:31 AM

eBay subsidiary PayPal is testing software at a handful of undisclosed Home Depot locations that allows customers to bypass credit cards and competitors like Google Wallet by using just their phone number and a PIN at the checkout. Last Friday's announcement by eBay disclosed that the trial software has been installed at five undisclosed Home Depot stores. The software allows shoppers to spend from their PayPal balances by typing in a phone number and PIN — no card or app required. PayPal's edge over other mobile payment competitors is that many of its 103 million active users carry a balance in their PayPal accounts, accrued from selling items on eBay auctions or receiving person-to-person payments. Since PayPal isn't designed to be a long-term savings account, that money is waiting for an excuse to be spent.


Home Depot trials, including one in San Jose, where PayPal is based, are currently just a "friends and family" test, but will inevitably evolve into a national rollout. A small number of PayPal employees are in the five Home Depot stores to help show customers how to make payments by typing their cell phone numbers and their PayPal PIN codes, according to PayPal.

Read the article in entirety on American Banker.

Back to Basics Robbery Prevention: Guns & Ammo Posted by AVCU on 11:05 AM

American Banker reports on a wild west feeling approach to robbery prevention by a Texas bank. Concerned about robberies, Chappell Hill Bank began encouraging patrons to bring legally concealed weapons into its branch.

After the small bank was robbed early last year, its ceo replaced the large "no firearms" warning at the bank's lone branch with a sign encouraging customers to carry licensed concealed weapons inside. The bank also pays employees to take a concealed firearms course. "If you're going to need help, you better help yourself because the government is not going to help when you need them," says ceo Edward Smith. "I've got seven women in teller cages who are licensed to carry a firearm," Smith says. "I wouldn't try to rob them." News of the new policy became viral and deposits poured in to the $24 million-asset bank from sympathizers in 12 states and three countries. No robber has dared threaten the bank since its policy change.

The rest of the story focuses on the challenge facing Chappell Hill and small banks like it in its balance sheet survival in today's economic environment. Read the entire story here.

CUs Beat Banks in Consumer Reports February Issue Posted by AVCU on 4:13 PM

The largest credit unions easily beat the largest banks in a side-by-side 11-page comparison cover story in the February issue of Consumer Reports. The article leads off with consumers' anger, noting that consumers are "furious at behemoth banks, for myriad reasons: lending practices that helped sink the economy, government bailouts, foreclosures, huge bonuses for CEOs, and now higher fees and tougher account requirements." It notes escalating fees and predicts continued experimentation with fee increases, tougher account requirements, cost cutting and new sources of revenue such as sharing customers' marketing data.

The article suggests credit unions as an alternative, saying that they have expanded services to match that of banks. The article reports that credit unions exist solely for their members and fees tend to be lower, and directs readers to a credit union locator.

Link to the article via our Facebook page or on the Consumer Reports website.

US News: 5 Reasons to Join a Credit Union Posted by AVCU on 1:21 PM

The January 3rd issue of the Money section of U.S. News delivers five reasons why everyone can, and should, join a credit union. Check it out via our Vermont Credit Unions Facebook page, and "like" us while you're there.

Fannie/Freddie Fees on Increase Posted by AVCU on 12:58 PM

Freddie Mac and Fannie Mae have announced increases in loan guarantee fees beginning April 1, 2012 under direction of the Federal Housing Finance Agency. FHA is charged with implementing a congressionally mandated increase. Legislation passed by Congress in December mandates at least a 10 basis point increase in the average guarantee fee in 2012. The payroll tax cut extension bill targeted a 10-year increase in Fannie and Freddie guarantee fees to cover most costs of the legislation that extended the payroll tax reduction and unemployment benefits for two months. The bill also mandates that adjustments be made to the guarantee fees so all lenders pay the same fee.

Free 2012 Fuel Economy Guide for CU Members Posted by AVCU on 11:57 AM

The EPA and DOE are providing free copies of their jointly produced 2012 Fuel Economy Guide for credit unions to make available to members in lobbies, and anywhere else. The 40 page booklet provides fuel economy ratings and data on new model year cars, sport utilities, and light trucks. It also provides tax incentives and disincentives, annual fuel cost estimates, and much more. Order free copies at http://www.afdc.energy.gov/feguide-order.

There's also a website version that provides more detailed information dating back to 1984, side-by-side comparisons, fuel-savings tips, air pollution information, links to car buying websites, etc. Link your credit union website to this resource at http://www.fueleconomy.gov 

Fiserv Advises Caution to FI's on Pre-Paid Cards Posted by AVCU on 10:06 AM

In a January 3rd American Banker article, card program provider Fiserv reports that far more fraud occurs with re-loadable pre-paid cards than with debit cards. As large banks looked more closely at pre-paid debit cards as a tool to help recoup lost revenues under Dodd-Frank, they find that users view them as disposable. Such cards, according to Fiserv, are more likely to be used in concert with a fraudulent funding source. Banks are still new enough to the prepaid realm that a lot of the payment format's risks remain undiscovered. In addition, the new card serves as another avenue for employee internal theft. The biggest risk, reportedly, is using them to launder stolen funds.

Read the article here.