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May 18, 2011

NetSpend's annual report says that they have been told by the Office of Thrift Supervision says any new relationships between MetaBank and existing program partners will require OTS approval.

NetSpend is an existing partner/program manager for cards issued by MetaBank. This is an interesting wrinkle

May 17, 2011

The directors of Southern Community Financial (SCMF) have taken an unusual step in their response to the financial crisis by reducing their own pay packages.

Executive compensation should be designed in such a way that directors share in the pain, and not just in the gain.

SCMF is breaking with the status quo in doing that. All kinds of financial companies have gone ahead with huge compensation packages for their brass, even as their share prices cratered. While this is a story with a certain populist appeal, shareholders are the real losers. Compensation systems don't work and there is little that can be done as long as boards maintain their current practices for nominating and electing.

I am going to contrast the decisions by SCMF, a small bank from Southeastern North Carolina, with AIG. AIG is

May 16, 2011

JP Morgan Chase has created a fee schedule for its Chase Total Checking Account ("CTCA") that systematically pulls dollars out of the pockets of retired Americans.

The Chase Total Checking Account charges a monthly fee to any account holder that fails to make a single direct deposit of at least $500 per month. The CTCA fee can be avoided if you maintain a daily minimum balance of $1,500, or if you have an average balance of $2,500, or if you have $5,000 in any combination of Chase accounts worth a combined sum of $5,000.

If the account holder can't meet those hurdles, then Chase takes $12 from the account. This in

May 12, 2011

EZCorp (EZPW), the parent of well-known pawn shop EZ Pawn, secured up to as much as $225 million in a revolving line of credit. The credit agreement is secured by various unnamed lenders and administered by Wells Fargo.

The new credit line replaces an $80 million line and a $40 million term loan that were both set to expire in the next 18 months. EZ paid down about $22.5 million in

May 10, 2011

JP Morgan Won't Commit to Avoid Genocide: I'm trying to be careful in how I describe the vote put before shareholders that would require the company to make sure that its investments and loans do not enable genocide. Some of the companies (PetroChina) that JP Morgan participates in have reportedly contributed to genocide in Darfur. The resolution is presented by Investors Against Genocide. It is hard to imagine a less

May 9, 2011

Linda Green strikes again.

Linda Green is the infamous nomme de guerre of the army of $10 per hour clerks that were robo-signing mortgage documents in order to cover up the lack of adequate documentation of mortgage papers.

Banks cannot foreclose without proof of a contract. These documents are part of the many forms signed during a closing. In their haste to

May 3, 2011

The NYSE says that it will no longer facilitate trading in shares of Jackson Hewitt beginning on Monday.

The threat of suspension was first issued on April 12th. The NYSE typically notifies companies that they must keep their shares above $1, and gives a 30-day warning for those companies to rectify the situation. Companies

April 29, 2011

Ben Bernanke wants banks to make more loans in low-and-moderate income neighborhoods.

Bernanke offered that opinion during his speech today in Washington. When asked to comment about how lending could stimulate more business activity, he said "We at the

April 27, 2011

Liberty Tax service provided a glowing update on its 2011 tax season with news that it increased volume by 11 percent and revenues by 12 percent year-over-year.

April 22, 2011

While Bank of America has been able to differentiate itself in the media through its clever redesign of its overdraft policies, most banks have done little to change. A more reasoned review of the Bank of America method should come to the same conclusion.

I reviewed about 100 comments made by consumers to the FDIC during its 2010 rulemaking

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