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Bank Notes: Paper Statements, Remote Deposit, Republic Bank

Adam Rust's picture

Posted March 18, 2013

Lobbying groups argue to protect paper statements: Consumers for Paper Options ("CFPO") is pushing back on a new resolution in Congress which would reverse initiatives to eliminated paper-based communications by the

Federal government. The resolution would force the government to offer paper statements to benefits recipients, to holders of US Savings Bonds, and to tax filers. Paper statements have been the source of much discussion in policy surrounding the prepaid debit card. One CEO of a major prepaid card issuer recently told me that less than one percent of his customers ask for a paper statement. Concurrently, many advocates insist that every card should at least offer the option to receive a paper statement. Most acknowledge that the privilege should bear some kind of cost, although even a few believe that it should be a free service. It is not clear if GoDirect's communications will attract the ire of CFPO, but given that Department of the Treasury has implemented its initiative to drop paper checks, the issue of paper is all the more relevant to the prepaid card market.

Why is anyone waiting to offer remote deposit? The people at Cachet Financial Solutions say that the per-transaction cost of a remote deposit is between 20 and 50 cents. Given that consumers are paying $3.95 for a load (after they have paid to cash their check), doesn't it seem possible that a program manager could find a margin at a price point that is lower than the current going rate for loads?

Republic identifies interest rate on RALs: In Republic Bank of Kentucky's (ticker: RBCAA) recent annual report, the company indicates the average rate of interest generated by its refund anticipation loan segment. According to RBCAA, their RALs generated an average rate of interest of 187.03 and 199.91 percent in 2012 and 2011, respectively. Nice to know that.  The next highest activity: traditional loans and fees, which delivered 5.05 percent and 5.35 percent during the same periods. Republic's cost of capital to supply those RALs: 0.19 percent and 0.43 percent, respectively.