Connecticut joined the federal government in a lawsuit against American Express Co. and a consent decree with MasterCard Inc. and Visa, with Attorney General Richard Blumenthal stating the companies effectively blocked merchants from alerting consumers about cheaper payment methods such as cash or credit cards, which can offer lower transaction fees to businesses.
“Our action seeks to bolster small businesses against the oppressive power of giant card companies,” Blumenthal said, in a written statement. “These card companies have muzzled merchants, silencing them from steering consumers to more affordable card options or cash. These card company practices have swiped billions from merchants every year.”
Along with Visa, Purchase, N.Y.-based MasterCard agreed to discontinue any such practices, and in a prepared statement agreed “to modify its rules to more specifically conform to its business practices.”
At deadline, the federal lawsuit proceeded against New York City-based American Express, which stated it is challenging the claims.
“American Express is a network of choice and the smallest in terms of merchant acceptance,” said Kenneth Chenault, CEO of American Express, in an op-ed published in the Washington Post. “Merchants don”™t have to do business with us, but those that do appreciate our overall service and value, including more business from higher-spending customers who carry our cards. In return, we require that they not discriminate against our card.”
Bank closing Norwalk, Fairfield branches
Fairfield County Bank is closing branches in Norwalk and Fairfield, even as federal regulators gave the bank a mixed review for its lending record in all the neighborhoods in which it does business.
The Ridgefield-based company has the seventh largest market share in Fairfield County, as measured by local deposits.
The branch at 707 Connecticut Ave. in Norwalk has been open since 1981, and as of June 2009 had $34 million in deposits of about $1.3 billion companywide. The branch at 1899 Bronson Road in Fairfield listed $27 million in deposits, having operated since 1996.
Separately, Fairfield County Bank received a “satisfactory” rating for its compliance with the Community Reinvestment Act, under which banks must demonstrate that they issue loans in the neighborhoods where they take deposits.
Citigroup sells $1.6B retail card assets
Citigroup Inc. sold GE Capital some $1.6 billion in retail credit card assets and relationships with 18,000 small and mid-sized businesses.
GE Capital is based in Norwalk and is a division of Fairfield-based General Electric Co. GE Capital”™s sales finance division has its main office in Kettering, Ohio.
The credit card portfolios focus on retailers and dealers in home furnishings, flooring, consumer electronics, and HVAC. Under terms of the agreement, Citi will provide interim servicing until GE Capital completes the conversion of merchants and cardholder accounts to its own system. Financial terms of the transaction were not disclosed.
“Sales finance is core to GE Capital and has delivered great results, including through the downturn,” said Mark Begor, CEO of GE Capital”™s retail finance unit, in a prepared statement. “This ”¦ makes a great deal of sense for GE Capital, adding high-quality assets and merchant relationships to what has been a core growth business for us.”
AG wants foreclosures frozen
Connecticut Attorney General Richard Blumenthal asked the state judicial Department to freeze all home foreclosures for 60 days, citing what he called defective document filings and institute measures to assure the integrity of future filings.
Blumenthal made the request after multiple banks acknowledged filing defective foreclosure documents, with so-called robo-signers approving affidavits without verifying the information in them.
“This freeze should stop a foreclosure steamroller based on defective documents and enable effective remedies,” Blumenthal stated. “The Judicial Department should take additional measures ”“ including requiring signers to state the basis for verifying information in affidavits ”“ to restore the integrity of foreclosure documents.”
At press deadline, the state judicial department had yet to act.
Greenwich restricting bank growth
In an attempt to check any mushrooming of retail banks, Greenwich”™s planning and zoning commission reportedly voted in favor of new regulations that bar banks from establishing branch operations on the ground floor of buildings in downtown Greenwich or retail zones in Cos Cob.
The regulations do not apply to banks that already have operations in Greenwich, according to the Greenwich Time.
Customers prefer online banking
For the second year in a row, more bank customers said they prefer to do their banking online compared to any other method, according to a new survey by the American Bankers Association.
In an August ABA survey of more than 1,000 consumers, 36 percent of respondents said they favor online banking over branches, ATM machines, or other options. Last year, just 25 percent of customers favored online banking.
Perhaps surprisingly, ATM machines fell in favor by a few percentage points.
“Clearly, online banking has fully penetrated the market,” said Nessa Feddis, ABA vice president, in a prepared statement. “Online banking is the future of banking as more ”˜Generation Y-ers”™ enter the marketplace. This means the industry will need to continue investing in technology that supports online banking because consumers see it as quick, convenient, accurate and safe.”
