Bank News

House Panel Approves Fed Audits, Carves Small Banks Out of Reform Fees

2009-11-20T08:50:56-07:00

The House Financial Services Committee Thursday approved two hotly-contested amendments to the financial services industry reform bill. One would give Congress the right to audit the Federal Reserve while the other exempts small banks and credit unions from paying fees into a fund that will be used in dissolving massive financial institutions.

Both measures were opposed at very high levels.

The committee approved an amendment sponsored by Rep. Brad Sherman (D-Calif.) on a 52-17 vote that limits the firms. Federal regulators can assess to raise money for a fund to cover the costs of dissolving failing banks and financial firms. Only financial firms with at least $50 billion in assets will be assessed to pay for the dissolution fund.

Committee Chairman Barney Frank (D-Mass.) opposed the measure, as did most large Wall Street financial firms. Frank wanted a $10 billion asset threshold and the ability to assess fees based on the risk in a bank’s investment portfolio.

The fee carve out was widely supported by small bank organizations and credit union groups.

The other measure that passed the committee was the highly publicized proposal pushed by Rep. Ron Paul (R-Texas) that would give Congress the authority to audit the Federal Reserve’s monetary policy.

On a 43-26 vote, the committee passed the measure, which will also reveal how much the Fed has lent and will lend to specific banks. The measure would require the Government Accountability Office to complete the Fed audit within 12 months of passage of the underlying bill.

Fed Chairman Ben Bernanke and other key members of the Obama administration, including Treasury Secretary Tim Geithner, had pushed hard against the measure. Frank also opposed the proposal.

Both amendments will be included in a financial system reform bill that is due to be delivered to the full House for consideration in the first week of December.

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Senate Gets Its Own Version of Financial Reform Bill

2009-11-18T07:46:18-07:00

Senator Chris Dodd (D-Conn.) has introduced the Senate side version of financial reform legislation that would put control of much of the financial services industry, including mortgages and credit cards, under the control of a new, independent Consumer Financial Protection Financial Agency (CFPA).

The CFPA would also oversee the Fair Credit Reporting Act (FCRA) and the Fair Debt Collection Practices Act (FDCPA).

Dodd's proposal, which is nearly identical in terms of consumer-protection features in Democratic legislation that's pending before the House of Representatives, would create a strong, independent Consumer Financial Protection Agency to oversee the sale and use of most financial products, such as mortgages and credit cards.

According to published reports, Dodd hopes his committee, which has 13 Democrats and 10 Republicans, will begin writing a bill early next month. Dodd is Chairman of the Senate Banking Committee.

“This is another extension of ‘don’t let a good crisis go to waste,’” Dan North, chief economist at Euler Hermes, ACI a trade credit insurance firm, said of the 1100-plus page proposal. “It will meet the same resistance as the House bill because it creates a whole new government agency. I don’t think any [of the existing federal regulators] are going to go away quietly.”

While the House bill and Senate measure are likely to have consumer support due to the protections built into the measures, the proposals face heavy opposition from the FDIC and other current financial regulators as well as from financial services industry groups.

“Enhanced consumer protection should fix what’s broken and not create another layer of federal bureaucracy that consumers will end up paying for,” the American Bankers Association says in its position statement on effective financial regulatory reform. “Improving the existing legal and regulatory structures – particularly by filling the gaps of regulation and supervision of non-bank financial providers – will be more successful, more quickly, than creating a separate consumer regulator.”



The ABA’s position statement further recommends that any regulatory reform:

Require regular reports to Congress to ensure that the structure of consumer regulation within agencies is functioning as needed
Empower the systemic risk regulator to look specifically at consumer issues to identify potentially threatening developments, like the rapid growth of subprime lending, and to require that regulatory agencies to address systemic consumer issues in a timely manner

North added that any new federal agency is likely to be costly and could stifle development of new financial products, an argument that financial services executives have made as well.

Though the Administration would like to see financial reform and supports the House legislation, health care is still tops on the Administration’s docket. Yet continued high unemployment and any further weakness in financial institutions – more than 100 banks have failed so far in 2009 – will likely keep financial reform ahead of other non-health care issues on the legislative agenda, according to North.

But Dodd’s proposal, as currently structured, will have a harder time in the Senate than Barney Frank’s House bill, according to Christie Sciacca, a former FDIC executive and director of LECG, a global expert services firm.

The Senate proposal would have one safety and soundness regulator rather than separate ones as under the current structure, according to Sciacca. The House bill doesn’t include this proposal.

The Senate bill will also receive opposition from the insurance industry because it proposes that insurance firms come under a single regulator rather than being regulated on a statewide basis, which has been the norm since the McCarran-Ferguson Act of 1945, Sciacca said.

Another major difference in the proposals, according to Adam Peterman, federal government affairs director for ACA International, is that the House actually has one piece of legislation that sets up the CFPA and deals with some other issues, another that establishes a systematic risk regulator, a third that involves shareholder rights and a fourth that covers regulation for derivatives.

On the Senate side, all of these issues are rolled into the single proposal to address some of the time lag. “Legislation moves more slowly through the Senate,” Peterman explained.

While ACA International has some concerns over the CFPA – a proposal that is identical in the House and Senate legislation, according to Peterman, the group has yet to develop a position on the entire Senate proposal.

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Banks and Health Care Debt Collectors Poised to Benefit from Rise in HSA Growth

2009-11-12T08:29:25-07:00

The dramatic downturn in the U.S. economy is accelerating the growth of high deductible healthcare plans (HDHPs), presenting short term opportunities for retail bankers and medical debt collection agencies, says an expert on the matter.

“Growth (in HDHPs) is very strong because of the cost of health care,” said Red Gillen, senior analyst for Celent, a research and advisory firm that publishes reports identifying trends and best practices in financial services technology. He estimates that in 2010, 8.2 percent of all U.S. workers will be enrolled in HDHPs, a 33 percent increase over 2009.

The growth is largely due to more employers offering the plan to their employees, and workers enrolling in them to save money on premiums, or because they have little choice.

According to Mercer LLC, a global provider of consulting, outsourcing and investment services, 18 percent of the early respondents to its 2009 National Survey of Employer-Sponsored Health Plans said they are eliminating high-cost or more generous health plan options in 2010 as a way to move employees into lower-cost consumer directed health plans tied to health savings accounts or health reimbursement accounts.

With more than half of employers experiencing layoffs over the past 12 months and nearly one-third anticipating future layoffs, Mercer said the move is as much out of necessity as a desire to cut costs. Consumer directed health plans are significantly cheaper, averaging about 20 percent less in 2008 than traditional PPO and HMO plans, Mercer said.

“The economy clearly had an impact on rising health care costs...So employers have had to work harder than usual to keep the health benefit cost increase for 2010 down,” said Linda Havlin, worldwide partner at Mercer. “Those organizations hardest hit by the recession are making the biggest cuts.”

Although employees enrolled in HDHPs will benefit from lower annual premiums, Celent estimates that their out-of-pocket expenses will more than double, leaving health care providers to collect not just partial payment, but in many cases, full payment for the services they provide.

Some providers have prepared for shifting environment, Gillen said. But others have moved beyond collecting from a handful of insurers to an environment where they have to collect from hundreds, if not thousands, of patients in which they have no contractual relation, he said.

“In the short term, health care providers will need to collect more and that will result in more billing agency business,” Gillen said. But he cautioned that collection agencies’ business models will be threatened longer term by providers who use technology to better determine the portion of the bill that is the patient’s responsibility and collect it upfront.

Banks, meanwhile, will benefit from an estimated 8 million new HSA accounts established by 2012, Gillen said.

“For the next two to three years, there will be more HSA deposits for banks,” Gillen said. But he warned that the outcome of health care reform will determine what, if any, future HSAs have.

“Some members of Congress feel that HDHPs is not sufficient. The question is minimal coverage and do HDHPs meet that definition. If they do meet that definition, there’s a rosy future for HSAs. If they do not meet the definition of minimal coverage, HSAs will slowly fade away.”

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Auto Finance Veteran Launches Windsor Remarketing

2009-11-11T08:02:33-07:00

FORT WORTH, Texas – Windsor Remarketing today announced its entry into the third-party servicing business. The company is currently signing up clients who need fast, cost-effective liquidation of their repossessed vehicles.

Windsor Remarketing customizes streamlined remarketing solutions for auto lenders, banks, credit unions, dealer groups and investors. No matter their size or type of collateral, all clients enjoy convenient service and top-tier results.

Services include:

Auction communication
Transportation of collateral to the most profitable market
Reconditioning and repair recommendations to boost value
Floor pricing using the latest market research
Live, in-person representation at auction to bring the best return on collateral
Online sales to foster buyer interest
Quick transfer of auction proceeds

The company is owned and operated by President Scott France, a 25-year veteran of the auto finance industry and former executive at Triad Financial, AmeriCredit and Omni Financial Services. France’s management team has worked together for nearly a decade. They each bring more than two decades of experience in the industry.

“The auto finance world has endured a constant roller coaster of change during the past 20 or 30 years. But my team and I have always adapted successfully,” France says. “At Windsor Remarketing, we’re advancing that same mindset of ease and flexibility. We tailor our sales strategies to fit clients’ needs. No bureaucracy, no cutting corners … just expert remarketing to minimize losses and maximize recovery.”

More specifically, clients leverage Windsor Remarketing’s:

Large scale
Nationwide network of top-performing auctions
Understanding of today’s used car market and vehicle values
Certification program that increases auction yield
Volume-based pricing at auction
Advanced technology and software
Efficient processes and procedures
Daily, interactive reporting

About Windsor Remarketing
Windsor Remarketing helps auto lenders, banks, credit unions, dealer groups and investors to quickly and effectively remarket repossessed vehicles. Services include auction communication, transportation, reconditioning and repair, floor pricing, live in-person representation, online sales and transfer of auction proceeds.

The company’s management team has worked together for nearly a decade. They each bring more than 20 years experience in the industry. Windsor Remarketing is headquartered in Fort Worth, Texas. For more information, call (877) 294-6376 or e-mail Remarketing@WindsorRecovery.com.

Windsor Remarketing frequently partners with Windsor Group (www.WindsorRecovery.com), a Dallas-based servicing company focused on skip tracing and national repossession.

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Cavalry Portfolio Services Unveils New Online Payment Center

2009-11-10T08:55:33-07:00

PHOENIX, AZ - Customers are now able to go online to the Cavalry Portfolio Services website to manage their accounts. With a few keystrokes and mouse clicks, customers can easily manage any of the following account services directly:

View account information
Update their profile
Make an offer to resolve their account
Set up a customized payment plan to resolve their account
Make a payment online

Cavalry Portfolio Services buys consumer debt portfolios from banks, credit card companies, consumer finance companies, auto finance companies and other financial institutions.

"At Cavalry, our focus is helping customers to create affordable resolutions," said Andrew Zaro, Chairman of Cavalry Portfolio Services. "We recognize that financial issues affect each person differently, so we built this website to provide our customers with more flexibility in managing their accounts."

Cavalry works with each customer individually to resolve debt issues, Zaro added.

"Most people get into debt because of a major change in their lives, such as a job loss, divorce or illness," he went on to say. "At Cavalry, we understand that. People's situations also change and improve over time. Our goal is to work with you, one-on-one, to find a financial solution."

For more information, visit www.cavalryportfolioservices.com or stay connected with us online at Flickr, Twitter, LinkedIn and Facebook. Customers with questions about their accounts can also call Cavalry at 866-434-2996.

About Cavalry Portfolio Services LLC:
Cavalry Portfolio Services collects distressed consumer debt portfolios from banks, credit card finance companies and consumer finance companies, as well as other industries including automotive, utilities and telecom. The firm has offices in Hawthorne, New York; Phoenix, Arizona; Tulsa, Okla.; St. Paul, Minn,; and Buffalo, New York. Its affiliate companies include Cavalry Investments, Cavalry SPV I and Cavalry SPV II.

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Debt Collection Agencies More Optimistic About Future

2009-11-10T08:55:33-07:00

U.S. collection agencies reported an improved outlook for performance in the next six to 12 months and the majority are planning to hire, according to the latest results from insideARM’s quarterly Credit & Debt Collection Industry Confidence Survey.

The Fall 2009 survey, conducted October 13 – 23, showed the highest reading ever for anticipated performance 12 months out. When asked to rate their company’s expected performance in 12 months on a scale of 1 to 5 – with 5 being the best score – more than 34 percent of collection agency respondents answered with a rating of 5, the highest level ever recorded in the survey. The average of responses on the question, 4.05, was also an all-time high.

View all data from collection agency respondents

Other accounts receivable management companies shared the collection agencies’ enthusiasm. The average expected performance rating for collection law firms was higher than agencies at 4.06, while debt buyers were not far behind at 3.94.

ARM companies also indicated that they were ready to expand payrolls en masse. More than 55 percent of collection agency respondents expect their staffs to be larger six months from now, an all-time high. Only 11 percent of agencies anticipate laying off workers in the near term, an all-time low.

The positive outlook drove the new ARM Confidence Index reading to 63.1, the second-highest level recorded.

The ARM Confidence Index, launched for the Fall 2009 survey, uses responses from the quarterly Confidence Survey to create a snapshot of how ARM firms see financial performance in the next six months, based on current conditions. The Index provides a measure of industry confidence on a scale of 0 to 100 and is calculated using data from select questions in the survry, including prior quarter performance rating, current performance rating, future performance expectations, and anticipated staffing moves.

The Fall 2009 Index reading of 63.1 was second only to the Fall 2008 reading of 65.5.

Although the readings in the Fall of 2008 and 2009 were similar, they were reached in very different ways. The 2008 survey was conducted as the financial crisis was sending Wall Street into a tailspin and Congress was passing the bank bailout. Confidence was very low. But unemployment had not yet snowballed, so ARM collection performance was average to above average, keeping the reading inflated.

In contrast, ARM company confidence was at an all-time high in the Fall 2009 survey. Performance, however, was a drag on the Index reading, as unemployment reached decades-long highs. To underscore the challenges facing ARM firms in the current environment, more than 72 percent of collection agency respondents reported using more payment arrangements to increase collection performance in the third quarter of 2009.

To view the full results of the Fall 2009 Credit & Debt Collection Industry Confidence Survey, including responses from creditors and vendors to the ARM industry, please visit http://www.insidearm.com/go/confidence-survey/fall09.

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Another Big Loss for Consumer Credit Card Debt in September

2009-11-09T08:27:54-07:00

Americans continue to hold back on credit card spending as banks slash lines of credit and charge off card accounts at a record pace. The Federal Reserve reported another large dip in consumer credit for September.

The Fed said late Friday that overall consumer credit in the U.S. contracted at an annual rate of 7.2 percent in September, or by a total of $14.8 billion. Analysts had a contraction closer to $10 billion.

September marked the eighth straight month of consumer credit declines.

Credit card debt, called revolving debt in the Fed’s report, led the way once again. Revolving debt fell at a 13.3 percent annual rate or by $9.9 billion to $889 billion. The Fed slightly revised upward the reading from August to reflect an identical 13.3 percent annual contraction rate.

Since September 2008, Americans have shed $86.2 billion in credit card debt. Although many credit consumers restrained card spending, much of the mathematical credit for the plunge can be given to soaring charge off rates at banks (“Banks Charging Off Debt at a Higher Rate than in Great Depression,” Oct. 28).

The Fed said that the annual rate of decline for revolving credit was 10.0 percent in the third quarter of 2009. In the first and second quarters of the year, the annualized rate of decline was 9.6 percent and 9.7 percent, respectively.

Nonrevolving consumer credit – like that found in auto, student or personal loans -- dropped at an annual rate of 3.7 percent in September, or nearly $15 billion.

Total consumer credit outstanding in the U.S. stood at $2.455 trillion at the end of September, down from its all-time high of $2.581 trillion in July 2008. The Fed’s report does not include debt backed by real estate.

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Equifax Helps Financial Institutions Improve Account Management Productivity Across Portfolios

2009-11-06T08:13:41-07:00

BOSTON -- Equifax Inc. (NYSE: EFX) today announced at the BAI Retail Delivery Conference the launch of a new solutionto help banks and financial institutions drive increased return-on-investment from their portfolio review processes. InterConnect for Account Management(TM) enables banks to automate account segmentation and risk decisioning for credit line adjustments and cross-sell offers. Now, banks can better identify customers most likely to accept product and service offers, resulting in increased cross-sell acceptance rates and improved customer retention.

"Providing this automation as a hosted solution will make it possible for more institutions to see the advantages of customer-centric decisioning," said James Taylor, CEO of Decision Management Solutions, a consulting firm focused on helping companies adopt decisioning technologies. "With complete control over credit policies, portfolio segmentation and customer treatment and no software to install, lenders can maximize their agility and keep their operating costs down."

While financial institutions historically have leveraged these types of tools with their credit card portfolios, many have considered them too complex and costly to use when managing deposit accounts. According to the Federal Deposit Insurance Corporation, the percent of increase year-over-year in total deposits for both commercial banks and savings institutions was approximately 27.4 percent from June 2005 to June 2009. Recent Equifax research has shown that while consumer debt has declined year-over-year more than $440B since 2000, the average personal savings rate reached its highest levels in the past decade during Q2 and Q3 2009.

InterConnect for Account Management enables banks to cost-effectively evaluate portfolio changes in both credit and deposit accounts - resulting in a comprehensive view of customers and their relationships with the financial institution. The solution provides a consolidated look at each customer within the portfolio and segments these customers based on behavioral and transactional data from Equifax, third-party sources and internal databases.

With this insight, banks can better measure individual risk and assess the overall ROI associated with an account.

"Current economic pressures make consistent account management especially important for today's financial institutions, which must address increasing regulatory requirements and respond quickly to changing market needs," said Dann Adams, president, US Information Solutions. "Our new solution provides the flexibility lenders need to accurately segment their portfolios and optimize credit risk decisions to reflect evolving market conditions and business priorities. Those that do stand a greater chance of winning the battle for reduced risk and profitable growth over time."

Financial institutions that adopt InterConnect for Account Management gain access to actionable customer intelligence delivered in real-time from internal and external databases. Leveraging business rules technology, the solution automates account-level decisions for:

Credit line assignments
Exception handling and compliance reporting
Implementation of new risk policies
Cross-sell and product optimization

Other benefits of the solution include its flexible suite of modules for data integration, decision management, rules editing and reporting which can be easily deployed, allowing businesses to respond quickly to market changes. The solution's comprehensive reporting tools enable financial institutions to view credit risk as well as transaction and operational activity to identify emerging trends.

InterConnect for Account Management is the latest addition to Equifax's Technology and Analytical solutions, which include loan origination, credit risk decisioning, fraud prevention and account opening products. For more information about InterConnect and other Equifax technology solutions, visit www.equifax.com/consumer/risk/account_opening/appro/en_us .

About Equifax Inc. (www.equifax.com)
Equifax empowers businesses and consumers with information they can trust. A global leader in information solutions, we leverage one of the largest sources of consumer and commercial data, along with advanced analytics and proprietary technology, to create customized insights that enrich both the performance of businesses and the lives of consumers.

With a strong heritage of innovation and leadership, Equifax continuously delivers innovative solutions with the highest integrity and reliability. Businesses - large and small - rely on us for consumer and business credit intelligence, portfolio management, fraud detection, decisioning technology, marketing tools, and much more. We empower individual consumers to manage their personal credit information, protect their identity, and maximize their financial well-being.

Headquartered in Atlanta, Georgia, Equifax Inc. operates in the U.S. and 14 other countries throughout North America, Latin America and Europe. Equifax is a member of Standard & Poor's (S&P) 500® Index. Our common stock is traded on the New York Stock Exchange under the symbol EFX.

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Bharatbook.com Included New Report On "Collections and Debt Management In UK Personal Lending" In Its Market Report

2009-11-05T08:35:07-07:00

The current economic downturn is forcing many banks to rethink their debt management and collections strategies as more individuals become unemployed and unable to repay their loans.

Scope of this research

Analyzes the current personal loan market performance and provides forward looking estimates for the non-standard population up to 2013.

Assesses the process of debt management and recovery and provides analysis on how it can be enhanced throughout the current climate.

Research and analysis highlights

Generally, financial institutions do not invest in debt collection activity until there is an economic downturn. Devoting resources towards improving debt recovery generates an income stream that would otherwise be lost.

The single biggest obstacle for any bank offering a personal loan is assessing the likelihood of a potential default. To help eliminate this problem there needs to be a more rigorous lending criteria and a greater degree of customer data sharing.

Banks are offering advice on budgeting and financial maintenance to help reduce the threat of delinquency, especially for individuals in difficult situations.

Key reasons to purchase this research

Sizes and forecasts the non-standard population as well as providing historical data for the personal lending market in the UK.

Describes in detail the process of debt recovery for borrowers who have fallen into repayment difficulties.

Offers insight and recommendations for enhancing debt management and recovery strategies.

To know more and to buy a copy of your report feel free to visit : http://www.bharatbook.com/Market-Research-Reports/Collections-and-debt-management-in-UK-personal-lending.html

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Online Resources Launches New Consumer-Friendly Online Banking & Billpay

2009-11-04T08:32:58-07:00

CHANTILLY, Va. – Online Resources Corporation (Nasdaq:ORCC), a leading provider of online financial services, today announced it has launched the next generation of its online banking and bill payment services, with approximately 200 clients deployed to date.

Developed with extensive usability testing, the services are expressly designed to enable financial institutions to provide the utmost in consumer-friendly online service.

The result of a two year, multi-million dollar investment, Online Resources’ hosted Internet Banking and Bill Pay applications now feature:

Highly adaptive, intuitive navigation – created in conjunction with usability, visual design and information architecture specialists, the new interface was consumer tested to meet the needs of any level of online banker, from the novice statement viewer to the small business user to the experienced power payer. The new, clean interface uses the latest in Rich Internet Applications (RIA) technology and “smart windows” for easy access to important information, which reduces information overload for the consumer.

Intelligent marketing and CRM tools – leveraging consumer-specific data, these new tools maximize awareness and education, boost online customer service power and drive adoption and up-sell opportunities. Driven by consumer usage pattern intelligence, the service incorporates contextual messaging throughout the interface, such as help links and advertisements that are timely and relevant to the user.

Seamless premium payments services – extensively integrated expedited payments, bill presentment and personal financial management services to promote deeper online interaction and individualization, backed by the consumer-friendly, real-time guaranteed funds model that puts the consumer in greater control of their finances.

For example, expedited payments are available within the standard online payments flow to enable consumers to make last minute payments with same day, guaranteed posting. Bill presentment is also available to all bill payers in the integrated payments service for easy access to actionable bill payment information. In addition, enhanced personal financial management tools, based on the company’s award-winning Money HQ service, offer useful budgeting, reporting and alert features.

“We are pleased to provide our customers an enhanced online banking and bill payment service. The Online Resources product incorporates usability best practices with enhanced bill payment features in a fresh, easy-to-use interface," said Susan Peterson, Chief Retail Banking Officer for MB Financial Bank. “The integrated online banking and bill payment services provides a superior online experience for our customers through what we call ibankmb.com.”

“Online Resources’ new release achieves a unique balance in providing comprehensive online services while delivering an intuitive, consumer-friendly interface,” said Sandra Shiba, Service and Information Manager at the University of Utah’s University Credit Union. “We are very pleased to make this latest release available to our members as an extension of our high quality service.”

“We believe we have addressed three complex areas – usability, marketing and payments – that are crucial to a successful online channel through an enhanced set of services that are sophisticated yet simple to use,” said David P. Munger, Vice President of Online Resources’ Banking Payment Services. “In addition, by providing consumers with ‘perfect knowledge’ of their finances, such as providing exact information about when a payment goes out and exactly how it is being sent, we are helping our clients deliver a highly consumer-friendly online service.”

Financial institutions can choose from multiple deployment options of Online Resources’ online banking and bill payment services. Based on their in-house IT capabilities, configuration needs, customization levels, operational priorities and numerous other factors, clients choose from highly flexible options for software, support and payments. For example, clients have combined Online Resources’ on-premise software to support extensive customization needs for online banking, but fully integrated hosted bill payment to support user interface requirements, augment customer service and meet payment warehousing needs.

About Online Resources
Online Resources (NASDAQ: ORCC) powers financial interactions between millions of consumers and the company’s financial institution and biller clients. Backed by its proprietary payments gateway that links banks directly with billers, the company provides web and phone-based financial services, electronic payments and marketing services to drive consumer adoption. Founded in 1989, Online Resources is the largest financial technology provider dedicated to the online channel. For more information, visit www.orcc.com.

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Fitch: U.S. Credit Card Performance Measures Mixed as Chargeoffs Drop

2009-10-30T06:33:44-07:00

NEW YORK--U.S. credit card performance measures exhibited mixed results last month with chargeoffs declining for the second time in three months while delinquencies resumed their upward trends according to the latest Credit Card Index results from Fitch Ratings. The results come as consumers continue suffer from high unemployment rates and a lack of credit availability.

"U.S. consumer credit quality measures remain pressured and chargeoffs will stay high until we see some improvement in employment conditions and in delinquency trends," said Managing Director Michael Dean.

Despite the ongoing unfavorable trends, Fitch continues to expect current ratings of senior credit card ABS tranches to remain stable given available credit enhancement and structural protections afforded investors. The outlook for subordinate tranches remains negative. Fitch expects the U.S. unemployment to peak at 10.3% in second-quarter 2010 and remain above 10% throughout 2010.

During the month, Fitch's Credit Card Chargeoff Index declined 77 basis points (bps) to 10.75%, marking just the third month-over-month improvement. Despite pulling back from last month's record high, the chargeoff index remains 71% above year-earlier levels.

Measured by Fitch's 60+ day delinquency index, late payments rose 16 bps to 4.22% after a 20 bp dip last month. Late stage delinquencies are running 33% higher on a year-over-year comparison. Early stage late payments increased for the month as well, with 30+ day delinquencies rising 13 bps.

"While somewhat seasonal, the rise in delinquencies provides further evidence that chargeoffs will remain elevated in the coming months," said Senior Director Cynthia Ullrich.

Monthly payment rate (MPR) remains stronger than earlier this year at 17.98%. MPR is well above the historical average of 15.98% and remains above the 2009 average of 17.37%. MPR has remained consistent year-over-year as current MPR is 9 bps higher than it was during October 2008.

During October, gross yield decreased 27 bps to 19.39%. However, gross yield continues to be strong relative to historical data as a result of discount options and repricing initiatives in various trusts. Compared to last year, gross yield is up 254 bps or 12%.

Three-month average excess spread increases 50 bps this month to 5.75%., its highest level since the February 2009 period. This increase is driven by the one month excess spread increasing to 5.99% this month. The increase in three-month average excess spread has enabled trusts that were trapping excess spread to release all or part of the trapped amount.

Additional information is available at www.fitchratings.com.