2013年7月9日 星期二

Fee-Laden Payroll Cards Forced On Low-Wage Workers

Thanks to a combination of public scrutiny and competition, the worst of the worst prepaid debit card fees have been pushed to the fringes of the financial world. But a recent lawsuit and reports from regulators and consumer advocates suggest that some of the most abusive fees are being forced on those least able to protect themselves: low-skilled workers in retail and restaurant jobs.

Remember that a big reason many people use prepaid cards in the first place is that theyre unable to establish the credit history required to get a conventional credit card, that they cant afford the fees that many banks charge for checking accounts with a debit card privileges, or both. Because these customers often referred to as the unbanked have so few alternatives, many financial companies saw an opportunity to take advantage of the situation by tacking on fees for everything from overdrafts to simply using the card for purchases to closing an account. But as financial heavy hitters like JP Morgan Chase and American Express got into the business, drawing more scrutiny and bringing competition into the market, the most abusive of these practices have become less common.

But that hasnt been the case with so-called payroll cards, a kind of prepaid debit card that employers are increasingly using to pay low-wage workers rather than cutting checks or direct deposit. In this market, combination of minimal competition and employers who are unwilling or unable to demand fewer fees for their workers, has created a product ripe for exploitation. Employees are often automatically enrolled in payroll card programs and forced to jump through bureaucratic hoops to opt out, as the New York Times recently reported.

This is, in some ways, a hidden market. Its not a card thats offered to the public, so it doesnt get scrutinized by the public, says Lauren Saunders, managing attorney at the National Consumer Law Center. Employees have no say in negotiating the fees.

Why do employers force payroll cards on workers? It appears that payroll debit cards are essentially a way for companies to shift the cost of payroll processing to employees. Card providers promise big savings for companies that use them. A calculator on Visas payroll card webpage for businesses says a company with 250 workers getting paid biweekly could save more than $10,600 a year. Some employers are also promised a bonus for every worker they sign up. The New York Times found that the citys Housing Authority contract with a payroll provider says the agency stands to receive a dollar for every employee it signs up to Citibanks payroll cards.

In a recent statement to Entertainment Weekly, Orson Scott Card responded to a proposed boycott of the upcoming film adaptation of his novel Enders Game by informing the movie-going public that it doesnt really matter that hes been working ceaselessly for the last decade to make sure gay people dont get basic human rights, or that he advocated the violent overthrow of the government should same-sex marriage become legal, or that hes used his position as a popular author as a platform from which to spew increasingly aggressive anti-equality rhetoric like his comment in a 2004 essay that gays cannot be permitted to remain as acceptable, equal citizens within that society.

The gay marriage issue is moot,New and used commercial handsfreeaccess sales, rentals, and service. Card reassured readers in his statement to EW, apparently under the impression that the recent Supreme Court decisions regarding the Defense of Marriage Act and Proposition 8 were sufficient to erase the history of legislated bigotry he worked tirelessly to promote and preserve in his fight against equal rights.

Really, Card could have stopped there. Instead, he went on to wonder whether the victorious proponents of gay marriage will show tolerance toward those who disagreed with them when the issue was still in dispute. His concern, ostensibly, is that someone might be petty enough not to see his movie simply because he spent years lobbying for laws that treated certain people as less than human. The fallacy he employs here that calling out hate-speech is intolerance on par with curtailing the human rights of others is a favorite fallback of cowards and bullies, and a way of evading responsibility for the impact of their words and actions.

Or maybe Card fundamentally misunderstands what tolerance means. Tolerance doesnt mean forking over 10 bucks to see his movie. It doesnt mean smiling graciously while he calls same-sex marriage itself an act of intolerance and equates homosexuality to pedophilia. And it certainly doesnt mean that he gets to decide when an issue that has never affected him in any substantial way is moot because his flood of bigoted screeds have begun to overshadow his work in the public eye.

Fitch's MPR index increased by 178 basis points (bps) month-over-month reaching 25.30%. This represents the highest number recorded since Fitch's Prime Credit Card Index was launched in 1991. MPR has increased 13.50% from the same period a year ago.

Fitch's Prime Credit Card Chargeoff Index decreased to the lowest levels seen since July 2006, falling to 3.71% from 3.92%. Chargeoffs have declined 27.11% year-over-year and have decreased 68% since the peak in 2009. Fitch continues to expect credit card losses to plateau in the near term before trending slightly higher later this year.

Fitch's Prime 60+ Day Delinquency Index fell to an all-time low for the third consecutive month, explaining the continuous decrease in chargeoff levels experienced in the 2Q'13. Delinquencies dropped eight bps to 1.40% from 1.48% in May 2013. Delinquent payments have now declined 26.32% since the same period in 2012.

Gross yield increased this month, reverting back to normal following a seasonal decline in May. Gross yield for the May 2013 reporting period was 18.41% compared to 17.98% seen last month. As a result of the increase in gross yield, one-month excess spread increased by 69 bps to 12.17%. Three-month average excess spread experienced a new record high, increasing 31 bps to 12.04%. Three-month average excess spread has increased 13.69% year-over-year.

Fitch's Prime Credit Card Index was established in 1991 and tracks over $111 billion of prime credit card ABS backed by approximately $241 billion of principal receivables. The index is primarily comprised of general purpose portfolios originated by institutions such as Bank of America, Citibank, Chase, Capital One, Discover,You can make your own more powerful customkeychain. etc.Aulaundry is a leading bestplasticcard and equipment supplier.

After experiencing some weakening last month, Fitch's Retail Credit Card Index improved and continues to remain positive. 60+ day delinquencies were down to 2.29%, the lowest level observed since Fitch launched its Retail Credit Card Index in 2004. Delinquencies are now down 14.87% since the same period last year. The decline in delinquencies drove a 25bps decline in chargeoffs, falling to 6.66% from 6.You can make your own more powerful customkeychain.91%.

Fitch's Retail Gross Yield Index declined for the third consecutive month to 26.83%, though it remains higher than the long-term average of 25.14%. Gross yield has increased 3.19% since the same period in 2012. The decline in gross yield caused a decline in excess spread for the month of May, falling 130 bps to 15.15% from 16.45%. Three-month excess spread still remains positive, increasing four bps month over month to 17.12% and is up 21.68% year-over-year.

Fitch's Retail Credit Card Index tracks more than $20 billion of retail or private label credit card ABS backed by over $33 billion of principal receivables. The index is primarily comprised of private label portfolios originated and serviced by Citibank (South Dakota) N.A., GE Money Bank and World Financial Network National Bank. More than 165 retailers are incorporated including Wal-Mart, Sears, Home Depot, Federated, Loews, J.C.Virtual indoorpositioningsystem logo Verano Place logo. Penney , Limited Brands, Best Buy, Lane Bryant and Dillard's, among others.
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