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June 8, 2011

The Office of the Comptroller of the Currency (OCC) issued a proposed rule that will allow credit products to return to debit cards.

I have suspected that the credit issue was far from resolved. The Office of Thrift Supervision (OTS) issued a directive last fall that forced MetaBank to pull its i-advance product. I-advance was a short-term credit product offered to customers that attached a regular direct deposit to their debit cards. The costs were

June 6, 2011

The momentum against college enrollment spiked this week. Much of the fervor draws from Texas Governor Rick Perry's State of the State address earlier in the year. Perry believes that college costs too much.

June 3, 2011

Numerous companies appear to be seeking a way to return short-term credit to the debit card platform.

Cash America (8-K, April 22, 2011): In the past, the MLOC services channel generated its earnings through loan processing services the Company provided for MetaBank related to the iAdvance MLOC product, as well as from fees generated from participation interests the Company acquired in the receivables originated by MetaBank in connection with the iAdvance program. The iAdvance program ended on October 13, 2010. The Company intends to continue pursuing the development of new MLOC opportunities during 2011.

It would not surprise me if many advocates mistakenly assume that this issue

June 2, 2011

Owners of Jackson Hewitt franchises remain in the dark about the future of their businesses.

In the days since Jackson Hewitt implemented a pre-packaged bankruptcy, there have been a few signals about what the future might hold. One is that Jackson Hewitt may shift its retail model from its traditional placement in strip malls to a new system focused on smaller kiosks. It is probably a good assumption that any future iteration of Jackson Hewitt will include some model that allows returns to be prepared digitally, too. There is even uncertainty about the kiosks that are in Wal-Marts.

Franchise contracts run for ten years. Franchise fees can run for between $5,000 and $25,000. There are other start-up costs, too. In all, Jackson Hewitt tells potential franchisees that it will cost as much as $96,000 to start. Franchisees return 15 percent of revenue to the corporate

May 27, 2011

A bill to adjust North Carolina's Consumer Finance Act (H810) passed out of committee on a 15-6 vote yesterday. The vote, which came on last-minute notice on Wednesday evening, will increase the maximum loan amounts for short-term unsecured loans in the state. The bill also gives lenders the right to charge a 5 percent processing fee on all loans.

The bill has been the subject of a lot of press attention. There is a short report from Americans For Prosperity which summarizes some of the views held by the bill's supporters.Here is a study written by the North Carolina Credit and Personal Finance Council that defends the bill. Al Ripley, an attorney for the NC Justice Center, offers this retort.

A garrison commander from Fort Bragg, Col. Stephen Sicinski, has traveled to Raleigh to campaign against the

May 25, 2011

[caption id="attachment_3645" align="alignleft" width="300" caption="This is what remains of a Commerce Bank branch in Joplin, Missouri after this week's tornado that destroyed much of the city. "]

May 24, 2011

Jackson Hewitt declared bankruptcy today, ending a period when such a plan had been expected but still not realized. The plan, characterized as "pre-packaged," will address their huge liabilities.

Jackson Hewitt finished the tax year with $12 million in cash, but $95 million in current liabilities. They had other current assets, although those included outstanding debts held against their franchisees. The trigger event were payments due on an outstanding line of credit with Wells Fargo. In all, they listed $389 million in

May 24, 2011

Green Dot is still doesn't own Bonneville Bancorp. In February 2010 (16 months ago), Green Dot agreed to buy Bonneville Bancorp for $15.7 million. Bonneville is a very small bank in Provo, Utah. Green Dot is buying the bank with cash. There was some initial upheaval about the transaction (from me) that this was a shadow transaction that allowed Wal-Mart to buy a charter. Steve Streit settled those concerns through a very direct outreach to advocates. Some advocates took the step of sending a letter to the Federal Reserve which rescinded their initial protest against the acquisition. Comments closed last summer, but the Federal Reserve still has not

May 23, 2011

The US Department of Justice filed an anti-trust lawsuit this morning that seeks to prevent H&R Block from buying Tax Act.

Block agreed to buy 2nd Story Solutions ("2SS'), the corporate parent of Tax Act, for $287.5 million on October 13, 2010.

At issue is the level of competition in digital tax preparation. Block and TaxAct follow Intuit in the tax prep market. Were

May 20, 2011

Two large mortgage insurance ("MI", also "PMI") companies face a deadline from the state of North Carolina, which if breached would mean that they would no longer be able to write MI in the state.

North Carolina imposes capital requirements on mortgage insurers. In general, they want an MI company to have a very sound financial position.

There are only 8 active mortgage insurance firms in the United States. One, CMG, is primarily focused on