Debit Card for Prisoners Gaining Interest: Continental Prisons Systems (CPSZ) share prices doubled on Thursday. On Friday, it moved another 34 percent.  Continental Prison has a kiosk and a card that enable prisoners to transfer funds. The cards save prisons a lot of money and help to avoid the issues that come with writing checks to convicts.  For the prisoners, it is a tradeoff: they can support family and friends on the outside, they can walk out with a card and (more…)

CompuCredit hires leading NC lobbyist to work with new CFPB: Former North Carolina Attorney General Rufus Edmisten was seen patrolling the hallways at this week’s State AG meeting in Charlotte. Edmisten was among a handful of lobbyists seeking to influence the ongoing work between the new CFPB and the State Attornies General. Interestingly, Edmisten is (more…)

Green Dot is a closely held company with a set of principal shareholders that have contacts throughout the narrow universe of the prepaid debit card market. Green Dot has filed an application to buy Bonneville Bank, a small one-branch state-chartered bank in Utah. The Federal Reserve is currently reviewing that application. There has been some discussion about the role of Wal-Mart in this transaction. Will this allow Wal-Mart to effectively own a bank? That is a valid question, but I believe that there is another pressing issue that needs to be resolved.

I think that this transaction could give new vitality to the payday lending industry. By giving the owners of Green Dot the rights to an unsullied bank charter, the Fed could empower high-cost subprime lenders to dramatically increase the scope of their business. This transaction involves a small dollar bank, but it carries the potential to impact millions of households.

The unbanked and underbanked market is vast. Some estimates put the size of this group at as large as 110 million, depending upon how it is defined. Many of these households are unbanked because they haven’t honored their commitments. However, others are underbanked simply because they don’t have a substantial credit history. Thin file and no-file consumers have a hard time getting a bank account, let alone a credit card, even though they have never defaulted on a loan. It is unfortunate that (more…)

CompuCredit‘s house is on fire, and it is throwing its payday lending business out the door.

CompuCredit is an Atlanta collections and consumer finance company that markets subprime products. Its product lines have included credit cards, and payday loans (pejoratively called micro-loans), along with collections on those kinds of products.

CompuCredit claims to target the 43 million (about 27 percent) Americans with a credit score below 650, as well as the 50 million Americans with no credit score at all.

They keep that sub-prime work in house, for the most part.  They provide Emblem, Embrace, and Majestic credit cards.  Not only do they provide subprime credit, but they also operate a “debt recovery” (collections!) through their subsidiary, Jefferson Capital.

CompuCredit has decided to sell its payday business.  It announced in a recent filing that it will spin off its (more…)