TIB Ticker - Gift Card Changes

July 29, 2010Daily Rates & Viewpoints From the Officers & Staff of TIB.

Gift Card Changes

There has been much written about the Credit Card Act of 2009. The Act, which went into effect February 22, 2010, focuses on consumer protections by limiting how credit card companies bill their customers.

One provision of the Credit Card Act that may not have received as much attention, but will have an impact on card product offerings, is set to be implemented next month. The Gift Card Act or Title IV establishes standards for General-Use Prepaid Cards, Gift Certificates, and Store Gift Cards.

The Federal Reserve announced final rules to restrict fees and expiration dates on gift card pursuant to the Credit Card Act of 2009. These new rules go into effect on August 22, 2010.

The two key components of the rule address expiration dates and fee limitations.

Expiration date restrictions

A gift card may not be sold or issued unless the expiration date of the funds on the card is no less than five years from the date of issuance.

Restrictions on dormancy, inactivity, or service fees

No person may impose a dormancy, inactivity, or service fee with respect to a gift card unless three conditions are satisfied. First, such fees may be imposed only if there has been no activity with respect to the certificate or card within a twelve month period prior to the imposition of the fee. Second, only one such fee may be assessed in a given calendar month. Third, disclosures regarding dormancy, inactivity, or service fees must be clearly and conspicuously stated on the card and the person issuing the card must provide these disclosures to the purchaser before the card is purchased.

TIB is in compliance with the new regulations and we are currently processing orders for new gift cards.

If you have any questions on these changes, please contact me or your TIB Correspondent Representative.

Mike Vessels Mike Vessels
Vice President/Card Services
mvessels@mybankersbank.com

Market Levels @ 7:50 AM CDT

TIB Fed Funds Rate - Previous Day
Agent	0.03%	Principal	0.15%	STAR Principal	0.20%

Key Indices/Commodities
1 - Month LIBOR	0.31%	Dow Jones	10497.88
3 - Month LIBOR	0.46%	NASDAQ 100	2264.56
1-Yr LIBOR	1.05%	S&P 500	1108.10
1-Yr CMT	0.30%	Spot Gold	1163.80
Prime	3.25%	Spot Silver	17.60
3-yr LIBOR Swap/Offer	1.13%	Spot Crude Oil	76.85
5-yr LIBOR Swap/Offer	1.87%	CRB Index	266.34
3 Mo - Fed Fund Futures	0.19%	6 Mo - Fed Fund Futures	0.19%

US Treasury Yields		US Non-Callable Agency Yields
Yield	Maturity	Yield	Spread
0.04%	90 - Days
0.09%	180 - Days
0.55%	2 - Year	0.68%	13bp
0.88%	3 - Year	1.07%	19bp
1.68%	5 - Year	1.87%	19bp
2.97%	10 - Year	3.03%	6bp
4.06%	30 - Year
242 BPs		Yield Curve(2's-10's)

Sample 1x Callable Agency Issues
Description	Call Date	YTC	YTM
FNMA 1.65 08/04/14	2/11	1.65%	1.65%

Select MBS Levels
Description	Coupon	Yield	Spread/Duration*
15-Yr FNMA	4.00%	3.04%	110 / 4.88
30-Yr GNMA	4.00%	3.71%	48 / 9.78
*Duration @ 12 month Historical CPR

Morning Commentary:	Blake Scharlach
Initial jobless claims dropped by 11,000 for the week ended July 24, pushing stock futures up and treasuries down. Strong earnings from Exxon Mobil and Goodyear are also creating positive sentiment. Dow futures are up roughly 50 going into the bell and 10 year treasury yields are back up north of 3%. The small incremental improvements in jobs data are telling us two things: 1) the job market is indeed getting better, 2) but very very slowly. The Fed reiterated this message yesterday in its Beige Book business survey: “employment has improved gradually in several Districts”, though “modestly”. Projections are calling for about 500,000 jobs to be shed by local governments in the next year, however, as a result of reduced property tax revenues.

Morning Commentary:

Blake Scharlach

Initial jobless claims dropped by 11,000 for the week ended July 24, pushing stock futures up and treasuries down. Strong earnings from Exxon Mobil and Goodyear are also creating positive sentiment. Dow futures are up roughly 50 going into the bell and 10 year treasury yields are back up north of 3%. The small incremental improvements in jobs data are telling us two things: 1) the job market is indeed getting better, 2) but very very slowly. The Fed reiterated this message yesterday in its Beige Book business survey: “employment has improved gradually in several Districts”, though “modestly”. Projections are calling for about 500,000 jobs to be shed by local governments in the next year, however, as a result of reduced property tax revenues.

Information contained herein is based on sources we believe to be reliable but its accuracy is not guaranteed. Customers should rely on their own outside counsel or accounting firm for specific circumstances. The securities, yields or levels discussed herein are for illustration purposes and are not guaranteed, not obligations of any bank, thrift or other entity and are not insured by the FDIC.

Permalink [ http://www.mybankersbank.com/tib-ticker/archive/date/2010-07-29 ]
Manager Newsletters [ Subscribe / Unsubscribe ] | Return to the TIB Home Page | Search TIB Ticker Archives

• Investment Sales • A/L Management • Portfolio Accounting • Safekeeping • Fed Funds • Trust Preferred • Call us at 800.374.4842.