Consumer Confidence Drops to Lowest Level In Six Years
Published: February 08, 2008
Recent comments by President Bush about signs of weakness in the domestic economy, further rate cuts by the Federal Reserve and poor jobs data have taken a toll on consumer confidence.
Consumer sentiment as measured by the latest RBC Consumer Attitudes and Spending by Household (CASH) Index has dropped to the lowest levels since the CASH Index was created six years ago. The overall RBC CASH Index, released today by RBC, stands at 48.5 for February 2008, almost eight points below January's 56.3 level.

Continuing a downward trend that has persisted through the last year, consumer sentiment fell across the board, driven especially by declining confidence in current conditions and growing worries about job security and investing, according to the survey of 1,006 Americans taken last week.

The RBC CASH Index is a monthly national survey of consumer attitudes on the current and future state of local economies, personal finance situations, savings and confidence to make large investments. The index is composed of four sub-indices: RBC Current Conditions Index; RBC Expectations Index; RBC Investment Index; and, RBC Jobs Index. The complete RBC CASH Index report for February 2008 can be viewed at
http://www.rbc.com/newsroom/rbc-cash-index.html

ACH Volume Increases 12.2 Percent in Fourth Quarter 2007
Published: February 08, 2008
The National Automated Clearing House Association (NACHA) released the 2007 fourth quarter ACH statistics, which continue to show an increase in the number of transactions taking place via the network over last year.

The ACH Network processed a total of 3,640,793,079 transactions in the fourth quarter of 2007, worth more than $7.3 trillion. This is a 12.16 percent increase from the fourth quarter of 2006 and a 5.61 percent increase from the third quarter of 2007.
Of these 3.6 billion transactions, 1,392,902,619 transactions were represented by the six eCheck Standard Entry Class Codes—ARC, BOC, POP, RCK, TEL and WEB. The eCheck transactions represented 38.26 percent of all transactions.

The greatest increase in eCheck services over the past year occurred with POP transactions, which experienced an increase of 55.34 percent from the fourth quarter of 2006, reaching 134,190,550 transactions. This is a 8.82 percent increase from the third quarter 2007. A POP transaction is a debit entry initiated by an originator pursuant to a single-entry authorization and a specified source document. The source document for a POP transaction is provided by the consumer at the point-of-purchase in order to effect a transfer of funds from the consumer's account.
WEB transactions experienced the second highest increase during the past year, with a total of 474,094,131 transactions in the fourth quarter of 2007. This is a 23.96 percent increase from the fourth quarter 2006, and a 9.48 percent increase from the third quarter 2007.

A WEB transaction is a debit entry initiated pursuant to an authorization that is obtained from the consumer via the Internet to effect a transfer of funds from the consumer's account.
ARC transactions totaled 689,256,243, which is a 12.41 percent increase from the fourth quarter 2006. This is a 5.31 percent increase from the third quarter 2007. An ARC transaction is a single entry debit initiated by an originator to a consumer's account pursuant to a specified source document. The source document is provided to the originator by the consumer via the U.S. mail or at a drop box location. The originator is the party originating the transaction, such as a merchant, collector, utility company, etc.

During the fourth quarter of 2007, TEL transactions totaled 87,541,923 in volume, which is a 14.78 percent increase from last year at this time. A TEL transaction is a single-entry debit that is initiated pursuant to an oral authorization obtained over the telephone to effect a one-time transfer of funds from the consumer's account. TEL transactions experienced a 4.03 percent increase from the third quarter of 2007.
RCK transactions decreased 8.75 percent from the fourth quarter of 2006. There were 4,737,090 RCK transactions in the fourth quarter of 2007, which is a 3.10 percent decrease from the third quarter of 2007. A RCK transaction is a debit entry that is made when a negotiable instrument or other eligible item is dishonored and is subsequently electronically presented through the ACH Network.

Finally, the newest eCheck application, BOC (Back Office Conversion), totaled 3,082,682 transactions during the fourth quarter of 2007, a 266.66 percent increase from the third quarter 2007. BOC allows retailers and billers that accept checks at the point-of-sale or at manned bill payment locations to convert eligible checks to ACH debits in the back-office.

To learn more about electronic transactions and how they can be used to increase the profitability of your company, attend the Technology Track of March for Success at Green Valley Ranch in Las Vegas, April 9-11, 2008. Register now.

Sallie Mae Announces New Finance Agreement
Published: January 31, 2008
As part of the new arrangement, the lawsuit filed by Sallie Mae related to the proposed merger of the company, as well as all counter claims, will be dismissed and the merger agreement has been terminated.

SLM Corporation, commonly known as Sallie Mae, announced on Jan. 28, 2008, that it had received commitments for $31 billion of 364-day financing from a consortium of banks led by Bank of America, JP Morgan Chase, Barclays Capital, Deutsche Bank, Credit Suisse and The Royal Bank of Scotland, and from UBS. This financing will replace the $30 billion interim financing put in place by Bank of America and JP Morgan Chase as part of the proposed merger transaction. Funding under the commitments is subject to various conditions.

As part of this new financing arrangement, the lawsuit filed by Sallie Mae related to the proposed merger of the company, as well as all counter claims, will be dismissed and the merger agreement has been terminated.

In April 2007, an investor group led by J.C. Flowers & Co. signed a definitive agreement to purchase SLM Corporation for $25 billion.
On Oct. 3, 2007, Sallie Mae notified the buyer group that all conditions to closing of the merger had been satisfied, and set Nov. 5, 2007 as the closing date of the merger. In response, the buyer group sent a letter to Sallie Mae on Oct. 8, 2007, asserting that the conditions to closing of the merger had not been satisfied because of, among other things, the alleged occurrence of a Material Adverse Effect under the terms of the merger agreement.

Then on Oct. 8, 2007, SLM Corporation announced that it had filed a lawsuit in Delaware Chancery Court against the buyer group, which includes J.C. Flowers & Co., JP Morgan Chase and Bank of America.

The lawsuit was seeking, among other things, a declaration that the members of the buyer group had repudiated the merger agreement, that no Material Adverse Effect has occurred under the merger agreement, and that Sallie Mae may terminate the merger agreement and collect damages of $900,000,000.

This article is provided as a service of ACA International's Government Services Program.

ACA Files Comments Regarding Data Furnishers
Published: February 12, 2008
ACA recently filed comments in response to proposed rules and regulations governing how data furnishers must handle direct disputes received from consumers.

In December 2007, federal agencies with authority to promulgate rules and regulations under the Fair Credit Reporting Act (FCRA) released proposed rules and regulations governing how furnishers must handle direct disputes received from consumers and requiring furnishers to create and implement policies and procedures regarding the accuracy and integrity of information relating to consumers that is furnished to a consumer reporting agency.

The interagency proposal released late last year by the Office of the Comptroller of the Currency, the Office of Thrift Supervision, the Federal Reserve System, the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the Federal Trade Commission identifies circumstances under which a furnisher is required to investigate a direct dispute from a consumer concerning the accuracy of information contained in his or her consumer report.

Currently, the FCRA requires furnishers to investigate direct disputes received from consumers. The proposed rules attempt to clarify this requirement by identifying circumstances in which a furnisher must conduct such an investigation. Under the proposed rules, entities furnishing information relating to consumers to one or more consumer reporting agencies must investigate direct disputes if the dispute relates to: consumer liability for a debt; terms of a debt; consumer performance or other conduct; and any information that concerns the consumer's creditworthiness. Read the full proposed rules.

On February 11, ACA submitted comments in response to the agencies' request for input on the proposed

Everybody Wins - By Kim Rath
Published: January 28, 2008
The FTC’s advisory opinion clarifying consumer notification is a win for both collectors and consumers.
Every two years, ACA's Legislative Council and Government Affairs Department meet to set the legislative agenda for the upcoming congressional session. Numerous issues are included on the agenda regarding the Fair Debt Collection Practices Act (FDCPA), the Fair Credit Reporting Act, the Telephone Consumer Protection Act, Social Security numbers, data security and other industry concerns. It's always exciting to report a government affairs win for the industry.

On Oct. 5, 2007, the Federal Trade Commission issued a formal advisory opinion in response to a request from ACA and due to the work of the Government Affairs Department. This marked only the second time the FTC has issued an advisory opinion regarding the FDCPA. The opinion clarified that the FDCPA permits collectors to inform a consumer that the collector has ceased attempting to collect a debt.

The FDCPA provides that if a collector contacts a consumer to collect a debt and the consumer disputes the debt or requests verification of the debt in writing, the collector must cease collection efforts until the collector sends verification of the debt to the consumer. Thus, upon receiving a dispute or verification request, a collector has two options:

• Provide the requested verification and resume collection efforts.
• Cease all collection activities. (If the collector chooses to cease collection activities, the collector is not required to provide verification.)

A collector's decision to terminate collection efforts rather than provide verification often results in consumer confusion, as the consumer is generally not informed of the status of her request or that collection efforts have terminated. However, collectors remain reluctant to notify a consumer that collection efforts have ceased in fear that such a communication would be in violation of the FDCPA.

In an effort to ease confusion for consumers and collectors alike, ACA requested the FTC formally address whether, if a consumer disputes a debt in writing and the collector determines to cease collection efforts, the collector would violate the FDCPA by notifying the consumer that it has ceased its collection efforts.

In response to ACA's request, the FTC asserted that sending notification informing the consumer that collection efforts have been terminated is not an attempt to collect the debt and, therefore, the does not violate the FDCPA. The FTC maintained that providing such information would be beneficial to the consumer, as the consumer would be aware the collector will no longer be contacting the consumer.

The release of this opinion also activated a section of ACA's revised Code of Ethics. Under ACA's amended code, if a collector is unable to provide verification, upon the consumer's written request the debt collector must send a notice to the consumer stating that collection efforts have ceased.

However, this section of the code only became effective upon the FTC's issuance of a formal advisory opinion indicating that such a communication would not violate the FDCPA. Now collectors can comply with this provision of ACA's code without fear of violating the FDCPA.

The amended Code of Ethics can be viewed in its entirety at http://www.acainternational.org/ethics.

The FTC's advisory opinion is extremely beneficial, clarifying the FDCPA for collection professionals and providing additional protection for consumers.

Kim Rath is the compliance manager for ACA's Legal and Government Affairs Department.

For more information regarding ACA's Government Affairs initiatives, visit http://www.acainternational