Bank of America to End Debit Card Overdraft Fees

Just about when new rules take effect forcing banks to halt overdraft fees unless a customer opts-in, Bank of America has decided to do away with overdraft fees on debit card purchases altogether. The nation’s largest bank stands to lose tens of millions, or more, in fee revenue. And now may force top competitors to follow suit.

Fed to Ban Credit Card ‘Inactivity’ Fees, Restrict Other Penalties

In new rules defining “unreasonable” penalty fees under credit card reform laws, the Federal Reserve today proposed prohibiting so-called “inactivity fees” and other fees that exceed the dollar amount associated with the card customer’s violation. The Fed is also requiring card issuers that have increased rates since January 1, 2009 to “evaluate whether the reasons for the increase have changed and, if appropriate, to reduce the rate.”

FTC Rule Clarifies Confusing ‘Free Credit Reports’ Ads

Starting April 1, advertisements peddling “free credit reports” will require new disclosures to help consumers avoid confusing offers – which often require customers to spend money on credit monitoring or other products or services, the Federal Trade Commission said today. Consumers may not realize that they are entitled to a “no-strings-attached” free credit report at AnnualCreditReport.com, the FTC said.

New Foreclosure Fix: Obama to Move $1.5B into Hard-Hit States

The Obama Administration will allocate $1.5 billion to state housing agencies to help “underwater” borrowers and those unemployed facing foreclosures in the hardest-hit states of California, Arizona, Nevada, Florida and Michigan. The funds are to be re-directed from the government’s primary bailout program, the Troubled Asset Relief Program, TARP. And the state agencies can use the additional aid to help troubled homeowners move into the government’s mortgage reduction program.

Pre-Reform Credit Card Offers Soar with Higher APRs

With weeks to go before historic restrictions on interest rate hikes take affect, credit card issuers waged a comeback in mailed offers in the fourth quarter of 2009, but the interest rates were higher and annual fees more frequent, according to the market research firm Synovate. The average purchase APR (annual percentage rate) offered in the fourth quarter was 13.51 percent, and it’s the highest recorded by Synovate’s “Mail Monitor” over the past five years. In addition, 35 percent of the offers mailed in the fourth quarter carried an annual fee, the highest share recorded by the firm in the past decade.

Obama’s Small Business Plan: $30B from TARP; Boost SBA

President Obama today formally launched his already-controversial proposal to re-direct $30 billion in bailout funds into community banks to bolster small business lending. “The more loans these banks provide to credit-worthy small businesses, the better a deal we’ll give them on capital from this fund,” Obama said in prepared remarks. The program would provide better rates on risk-related capital to banks that boost lending to small businesses.

Treasury, HUD Try Speeding Up Foreclosure Rescues

U.S. Treasury and Housing and Urban Development (HUD) officials today announced new paperwork guidelines to speed up permanent mortgage modifications for borrowers under the government’s beleaguered foreclosure rescue program. The new rules require key documents – including proof of income – from homeowners before initiating a trial modification. The upfront requirement is meant to accelerate the process at end of trials – when borrowers are evaluated for permanent relief with the reduction of monthly payments by hundreds of dollars. Previously, the paperwork was required after trial start-up.

Blippy: Twitter for Credit Card Users Goes Public

Blippy, the Twitter-like social media site that displays how much you’ve spent and what you’ve purchased with your credit or debit card is now live to the general public. Blippy has been tried by about 5,000 people in invite-only beta testing, but this week Blippy started scrolling live its users’ purchases. When you sign up, you can attach a credit or debit card to the service and let your followers know the song you picked up on iTunes or movie on Netflix — well, you get the idea.

Fed Finalizes ‘Milestone’ Credit Card Reform Rules

The Federal Reserve today approved a final rule restricting interest rate hikes in the first year of credit card agreements with consumers, and unexpected increases on existing credit balances – except in the case of variable-indexed interest rates. “This rule marks an important milestone in the Federal Reserve’s efforts to ensure that consumers who rely on credit cards are treated fairly,” said Federal Reserve Governor Elizabeth A. Duke. “The rule bans several harmful practices and requires greater transparency in the disclosure of the terms and conditions of credit card accounts.”

Twitter Founder’s Credit Card Device Faces Challenges

With much fanfare recently, Twitter co-founder Jack Dorsey started public testing of a new device, dubbed Square, that attaches to an iPhone and accepts the swipe of a credit card for small business owners. But the outlook has changed for the start-up that would cater to business owners who can’t deal with the cost or hassles of merchant accounts. A long-established company in the credit card transactions business will beat Square to market with a smart phone card reader, PAYware Mobile, which also targets low-volume businesses.

Next Page »