November 16 ,2001

 

Music—You can turn off by going to the player on the lower left side above

the virus center.  You can turn the music off on your computer via you speaker

icon on your tool bar, program, control panel.  You can manually turn down or

off the music with your volume control on your computer or speaker.

 

Headlines---

 

      Toshiba Zero % Lease/No Payments for 90 days, too!!

  Subprime Lenders Targeted by California State Investigators!

      Providian hit hard by Wall Street!, Closes Facility, Cuts Staff

          BancWest Corporation Declares Di

                Bill Gates touts Xbox at its worldwide launch

                                     D&B and LiveCapital Partner To Provide

                                Credit Automation Solution with  D&B and LiveCapital

                                             McCue Web Tools plus LeasePak                                         

           Retail sales soar by record 7.1 percent in October

                Electronic payments gaining on check use

                   Sterling Bancorp Increases Its Effective Annual Dividend 24%

                       KeyCorp Announces Regular Quarterly Dividend

                                            Santa Clara Chooses Procure+ 6.5 From ePlus

    Good News:                                                       

October home sales fall but signs point to rebound

 

   Bad News:

              Employers Cutting Bonuses, Delaying Pay Raises

      

   Special:

          Equipment Leasing Association Thursday Newsletter Highlights

 

                                           Friday---Odds and Ends

Beaujolais Nouveau arrives

 

### denotes press release

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Toshiba Offers Zero Percent Leasing For Up to 30 Months With 90-Day Payment Deferment

IRVINE, Calif.

    Low Rates Matched With 90-Day Payment Deferment Option


    Enable Small and Medium Business Customers to Easily Obtain New


    Technology Products Despite End-of-Year Budget Constraints

 

    Toshiba America Information Systems Inc. (TAIS), today announced affordable lease offerings to SMB customers that make this the best time ever to obtain new Toshiba notebooks, servers, desktops and accessories.

 

    Available immediately through Toshiba Financial Services, the new EasyLease finance options offer Toshiba customers zero percent financing with 90-day payment deferment for equipment leases of 24 or 30 months.

 

    "Leasing is an ideal solution for SMB customers looking to grow their business without making significant investments in technology infrastructure," said Robert Baker, national program manager for Toshiba Financial Services.

 

    "Toshiba's new EasyLease offerings allow customers to enjoy new Toshiba products without tying up their capital and accruing severe interest costs. We're making it easy and affordable for SMB customers to upgrade their technology and ring in the new year one step ahead of the competition."

 

    Toshiba's EasyLease program offers customized financing options designed to meet the unique requirements of SMB customers. The zero percent offer is a fair market value (FMV) lease available for either 24 or 30 months with an unprecedented 90-day deferred payment option.

 

    The minimum order to qualify for this lease is $3,000; maximum order is $100,000 through resellers and $50,000 through shoptoshiba.com. Upon completion of the lease agreement, customers have the option to purchase the products at fair market value, extend the lease for fair market value or return the equipment.

 

    Applying for the new zero percent interest EasyLease can be done directly through Toshiba by visiting www.shoptoshiba.com, or through a local authorized Toshiba reseller. For more information on EasyLease, as well as additional Toshiba Financial Services programs, call 800/207-8362.

 

 ( courtesy ELAonline.com )

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Funding Tree/Growth 1, Southern California

 

Thank you readers for information you have supplied. We are

working on this story, seeking a comment from Kendra Bernal

 

 

 

Subprime Lenders Targeted by California State Investigators

by James P. Sweeny

Copley News Service

SACRAMENTO -- State attorneys have accused two of California's largest subprime lenders of systematically collecting millions of dollars in illegal fees and charges from largely poor and minority customers.

Household Finance Corp. of California and its subsidiary, Beneficial California Inc., have admitted more than 36,000 violations of state law in connection with audits performed last year, according to a lawsuit filed by the state Department of Corporations.

A sting conducted by state investigators, however, suggests the number of violations may be much higher, a state official said. The state is seeking an $8.6 million penalty, plus reimbursement of victims.

The lawsuit called the lenders' conduct "purposeful, persistent and obstinate . . . representing, at best, plain indifference, and, at worst, intentional disregard" of state law.

The legal action is believed to be the first of its kind filed by any state against Illinois-based Household International, the parent company of Household Finance and Beneficial and the nation's second largest consumer finance company.

State investigators have been tracking what they considered a pattern of illegal practices at the Household's California offices since at least 1998.

"Three years ago, the Department of Corporations directed Household Finance to stop charging excessive administrative fees," said Corporations Commissioner Demetrious Boutris. "Not only did Household fail to comply, but it began practicing even more abusive lending procedures and passed these practices on to . . . Beneficial."

The lawsuit, filed quietly on Friday in Los Angeles, caught Household by surprise.

"We recognized there was a problem when the department brought it to our attention" after the 2000 audit, said Megan Hayden, a Household spokeswoman. "Following their instructions, we not only refunded the customers who were affected but also put the necessary technological and human controls in place to make sure that would never happen again."

Household has returned more than $1.6 million to its customers since last year. Overcharges range from as little as $1.10 to nearly $4,800 in one case.

Subprime loans come with higher interest rates and serve a clientele that often has a spotty credit history. Last year, Household and Beneficial wrote nearly 237,000 such loans, valued at $1.7 billion.

The illegal charges include excessive administrative, recording and late fees, as well as improper prepayment penalties. The state limits administrative fees to $50. Household and Beneficial charged some customers $75. Rather than maximum late fees of $15, the companies allegedly assessed 15 percent penalties.

The audit done last year found that Household continued to assess illegal charges noted three years earlier, and had extended the practice to Beneficial, which it acquired in 1998.

In addition, Beneficial was "routinely selling credit and involuntary unemployment insurance to borrowers who did not qualify for them because they were in the armed forces or their income was from sources other than employment," the suit stated.

Household is subject to a state review every two years. After initial problems were identified, the state ordered the corporation to audit itself. Household later reported finding more than 36,000 violations.

But the state had deliberately withheld information on eight accounts in which it had found violations. Of those, only two were reported in Household's self-audit, the lawsuit contends.

Household has been the top target of a national campaign waged by a grass-roots organization known as ACORN, or the Association of Community Organizations for Reform Now.

"One of their biggest problems is hiding what the real terms and conditions are of their loans," said Clare Crawford of the organization's San Diego office.

ACORN released a report yesterday that said predatory lending has skyrocketed nationwide. Last year in California alone, such practices cost homeowners nearly $600 million, the group estimated.

_________________________________________________________________________

Providian hit hard by Wall Street, and to Stay Afloat,

cuts staff, closes facility

 

Shares of struggling credit card issuer Providian Financial Corp. fell 20 percent Thursday as investors reacted to the company's turnaround plan and a disclosure that its loan portfolio continued to deteriorate in October

 

by Christian Berthelsen, S.F. Chronicle

 

In an attempt to bolster its business and restore investor confidence, Providian Financial Corp. yesterday initiated a restructuring that includes layoffs, asset sales and moves to shore up its balance sheet.

The company said it is laying off 700 employees in a Henderson, Nev., payment processing facility in an effort to reduce operating costs. The move is expected to help the company save $18 million annually.

In government filings, the company also said it will take a $12 million charge during the fourth quarter to cover costs of the closure. All employees at the facility are expected to be released by Dec. 7, but will be paid through Jan. 13. The company hinted last month it would consider workforce reductions.

One of the restructuring moves disclosed in yesterday's government filings is the sale of $900 million in credit card accounts receivable, primarily from its well-heeled "platinum" accounts. Providian will add the cash to its books, and investors will be paid with revenue from interest payments and fees on the accounts.

Providian also disclosed for the first time that it is seeking to sell $3 billion, or one-third, of its troublesome subprime $9 billion credit card portfolio. Until yesterday, the company had not said which assets it was considering selling. The accounts to be sold are expected to come from the lowest-credit quality segments of Providian's shaky card portfolio.

The steps, which were disclosed after trading ended yesterday, had little impact on Providian's stock price, which closed down 18 cents per share at $3. 65. Providian has lost more than 94 percent of its market value from its high of $64.06 per share in January, as major investors fled the stock amid concerns that the company was not being candid with Wall Street about its financial problems.

The company has been blasted by analysts for not fully explaining accounting changes that reduced credit loss rates in the second quarter. In addition, several shareholder lawsuits have been filed alleging senior company officers, including chief executive Shailesh Mehta, sold shares and received more than $22 million before the accounting changes were noticed. The company missed earnings projections in the third quarter by 75 percent and said it is looking for a new chief executive after Mehta said last month he would step down.

The company also said it is canceling its quarterly stock dividend for the foreseeable future to save cash.

That cancellation is expected to save the company about $8.6 million per quarter. That's relative minor -- the company had $446.7 million in cash at the end of last year -- but it's an effort to show Wall Street it is trying to right the company.

Providian became an industry leader in providing credit cards to clients with shaky or limited credit histories at interest rates of more than 20 percent at times. That business suffered during the second and third quarters of this year as credit losses and uncollectible fees came home to roost when the economy began to sour.

Analysts had questioned whether the company would be able to sell its subprime accounts without adding in more-attractive customers. But during an interview yesterday, Chief Financial Officer James Rowe said Providian, which retained Goldman Sachs and Salomon Smith Barney to explore sale options, has received interest from other potential suitors.

"We feel comfortable that there's a market for the assets," he said.

E-mail Christian Berthelsen at cberthelsen@sfchronicle.com

 

 

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BancWest Corporation Declares Divident
 
(NYSE: BWE) today announced that a quarterly dividend of 19 cents per share
will be paid December 14, 2001, to holders of record of its common stock as of
November 30, 2001.  This represents no change from the previous quarter.
 
    With respect to future dividend payments, the merger agreement between
BancWest and BNP Paribas provides for payment of a pro-rata dividend to
BancWest stockholders based on the number of days from the latest record date
(November 30, 2001) through the day before the actual closing date of the
transaction.
 
    BNP Paribas has agreed to acquire the 55% of BancWest stock it does not
already own for $35 in cash per share.  The transaction has been approved by
BancWest shareholders, but remains subject to approval by the Federal Reserve
Board, and expiration of a mandatory 15-day waiting period thereafter.  The
parties expect to complete the transaction in the near future.
 
    BancWest Corporation is a bank holding company with assets of
$19.8 billion.  It is headquartered in Honolulu, Hawaii, with an
administrative headquarters in San Francisco, California.  Its principal
subsidiaries are Bank of the West (193 branches in Northern and Central
California, Oregon, New Mexico, Nevada, Washington state and Idaho) and First

             Hawaiian Bank (56 branches in Hawaii, two in Guam and two in Saipan

 

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Our Webmaster Carl Moberg went to the Comdex

Show in Las Vegas, Nevada; drove from Silicon Valley. Arrived

at Casesr’s without a reservation, but got an excellent room

for $79.  Last year, he reported it was standing room only

for Bill Gates. This year, he was late, but sat in row 14.  Not

many new developments he reports, but said everyone was

calling the Comdex show the ComX Show because all

everyone heard about was:

 

Bill Gates touts Xbox at its worldwide launch

 

By Matt Moore, Associated Press,

 

NEW YORK (AP) Microsoft Corp. revved up its publicity machine to unveil the Xbox Thursday, whetting the public's appetite for the new device amid what may be the fiercest competition for the home video game market in years.

 

Within the confines of Toys R Us' flagship store in Times Square early Thursday, company chairman Bill Gates touted the Xbox as a gameplayer's dream.

 

''We were going out and talking to the gamers about what they want,'' Gates said, to a roomful of buyers who waited in line some all night to be the first to get their hands on one of the 1,000 consoles shipped to the store, which doesn't officially open until Saturday.

 

Jimmy Keethe, a teen-ager from Cliffside, N.J., said the Xbox is what he wants.

''It's got great graphics. You can actually see the football players sweat,'' he said, referring to ''NFL Fever 2002,'' which is one of 15 games available for the Xbox.

Gates said as many as 30 games will be available for the holiday season, but conceded the demand for the consoles may outpace the supply.

 

''Tonight we think we brought a lot of Xboxes here and tonight is probably the only night for a long, long time where everyone can get an Xbox,'' he said.

 

Microsoft expects to make and sell 1.5 million consoles by the end of the year, but Gates said ''we expect to be in pretty short supply'' because of consumer demand.

The $299 console, which is the only one with a built-in hard drive and a plug for high-speed Internet access, went on sale Thursday morning at 10,000 retailers nationwide.

 

Xbox will be battling it out this holiday with Nintendo's $199 GameCube, which is due out in stores on Sunday. The hot entries, their near simultaneous launch a first for the $20 billion video game industry, enter a free-for all competition with the reigning leader Sony's Corp.'s year-old PlayStation2, which also retails for $199

 

 

Live Capital

 

I thought you would be interested in our news: D&B and LiveCapital are

 co-marketing and selling LiveCapital's DecisionExpressTM with D&B's global

 business database, enabling large enterprise customers to confidently

 automate credit decisions. The companies are acting as preferred

 providers, recommending each other's products and services. 

 Please feel free to call me with questions, or to set up a time to speak

 with Mike Grossman, LiveCapital's CEO.

 Regards,

 Kathy Finnegan

 LiveCapital

 _____________

 ph: 650-350-3642

 fax: 650-401-3636

 kfinnegan@livecapital.com

 

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D&B and LiveCapital Partner To Provide

Credit Automation Solution

 

LiveCapital’s DecisionExpress Ideal for Enterprise Customers, Expands D&B’s Risk Management Solutions

 

 

Murray Hill, NJ and San Mateo, CA. – D&B (NYSE: DNB), the leading provider of global business information and technology solutions, and LiveCapital, a leader in business credit automation, today announced an agreement to co-market DecisionExpressTM, LiveCapital’s flagship product, with D&B’s global business database.  The new joint solution will initially be targeted to accounts within D&B’s global customer base to enable customers to confidently automate credit decisions. 

 

D&B and LiveCapital will act as preferred providers, recommending each other’s products and services to customers. 

 

“DecisionExpress complements and expands D&B Risk Management Solutions which help customers increase profitability by managing credit exposure and transaction risks.  This solution will help our global customers make more confident decisions,” said Larry Kutscher, president of D&B E-Commerce Solutions.  “Our solutions are an integral part of our customers’ decision-making processes, which enhances our core business, a key element of our Blueprint for Growth strategy.”

 

“DecisionExpress enables our credit decisions to be made in real-time, and we are able to authorize new customers quickly,” said Bob Dryburgh, President of Straightline, a new steel distribution business and a division of United States Steel LLC. “DecisionExpress, coupled with D&B information, automates our decision criteria and streamlines our credit process, giving us fast results. We’re very pleased with LiveCapital’s responsiveness and the immediate benefits realized from the addition of D&B information into our decision making process.”

 

DecisionExpress automates each customer’s unique process, providing access to D&B business credit information, third party consumer credit data and information from the customer’s internal CRM and ERP systems. Installation includes the integration of D&B information, other data sources, D&B and custom scorecards, and configuration of decision criteria and workflow needed to support the credit process. The result is a credit automation and management system that provides real-time, flexible decisions using each customer’s unique data, scorecards and rules.

 

“We chose to partner with D&B because the company maintains the world’s premier business database, has an unparalleled understanding of risk management and customers’ needs, and an established, global distribution channel.  Partnering with D&B to offer this joint solution will help LiveCapital to increase our customer base and to establish DecisionExpress as a leading credit automation solution for large enterprises,” said Mike Grossman, CEO of LiveCapital.  “D&B’s selection of LiveCapital as a preferred technology partner is an endorsement of DecisionExpress and its suitability for enterprise customers.”

 

# # #

 

About D&B

D&B (NYSE: DNB) provides the information, tools and expertise to help customers Decide with Confidence.  D&B enables customers quick access to objective, global information whenever and wherever they need it.  Customers use D&B Risk Management Solutions to manage credit exposure, D&B Sales & Marketing Solutions to find profitable customers and D&B Supplier Management Solutions to manage suppliers efficiently.  D&B’s E-Commerce Solutions are also used to authenticate and verify potential trading partners online, increasing trust and confidence in e-commerce transactions. Over 90 percent of the Business Week Global 1000 rely on D&B as a trusted partner to make confident business decisions.  For more information, please visit www.dnb.com.

 

 

About LiveCapital

LiveCapital is a leading provider of credit automation products to Fortune 1000 companies. The company's flagship product, DecisionExpress, automates the credit approval process to speed sales and reduce operational costs. Privately held and headquartered in San Mateo, California, LiveCapital has facilitated the approval of over $6.0 billion in business credit, enabling real-time credit approval for industry leaders including United States Steel LLC, John Deere and Autodesk. Investors include D&B, Kleiner Perkins Caufield & Byers, XL Capital Corporation, Gotham Partners, Red Rock Ventures, Irwin Ventures and InterWest Partners. For more information, please visit www.livecapital.com.

 

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LeasePak Web Tool Improves Deal Flows for Lessors, Dealers, Vendors

New Tool Reflects Growing Importance of Partnerships with Lessors’ Dealers and Vendors

 

BURLINGAME, CA, -- McCue Systems has enhanced its LeasePak lease-management system to improve the efficiency of deal flows between lessors and their growing networks of dealers and equipment vendors. The new product module was unveiled at this year’s Equipment Leasing Association (ELA) annual meeting.

 

“To boost competitiveness, lessors are aligning strategically with dealers and vendors for increasing numbers of small- and mid-ticket lease originations,” says John McCue, CEO and founder of McCue Systems. “This new LeasePak module, LeasePak DV, reflects this trend.”

 

“LeasePak DV enables lessors and originators to participate in processing their transactions together. It improves the efficiency of deal flows since a lessor can begin credit investigation upon receipt, bypassing the need to set up the application in a workflow system,” adds McCue. “LeasePak DV also gives dealers and vendors greater control over their transactions, which helps lessors strengthen their relationships with these originators. We believe this will ultimately translate into higher volumes for participating lessors.”

 

A ‘Gateway’ to Lease Originators


The LeasePak DV module is a gateway that allows lessors to provide vendors and dealers with Web access to their LeasePak systems without compromising security or data integrity. The result is an easy-to-navigate, but carefully restricted, working environment.


Dealers and vendors can use LeasePak DV’s specially designed screens for efficient application entry, lessee and guarantor set up, and the addition of assets to their transactions. Preset application templates and LeasePak’s security infrastructure allow vendors and dealers to generate applications from their desktop that automatically populate the appropriate lessor work schedule.

Dealers and vendors also can view their transactions (inquiry mode only) in real time to determine status. Lessor representatives can open transactions as necessary for dealers and vendors to input additional information. When processing resumes, the transactions revert to view-only access for dealers.

 

The software was made available October 26, 2001.

 

About McCue Systems


McCue Systems has been offering business solutions to the leasing industry for over 30 years. Its flagship lease management system, LeasePak, is the solution of choice among leading banks, leasing companies, and financial institutions, accounting for over $100 billion in net assets, worldwide. With the recent release of its suite of Web-enabled e-Leasing solutions, McCue Systems leads the leasing technology industry in the development of e-Leasing tools to reduce operating costs and enable lessors to deliver superior customer service via the Web and wireless PDA.

 

The leasing experts at McCue Systems work closely with lessors to put the company’s 30-years-plus of leasing expertise to work, to streamline lease operations and enhance customer retention at every stage of the lease lifecycle.

Clients include Banc One, M/C Leasing, Volkswagen Credit, Bank of Hawaii, Bank of Tokyo/ Mitsubishi, Cisco Systems, ORIX / Australia and KeyBank.

See www.mccue.com for more information about the LeasePak lease management system and the company’s comprehensive range of consulting and technology services.

 

McCue Systems, Inc.’s LeasePak® lease management system now enables leasing companies to improve their customer service with a lessee self-service solution, MyLeaseOnline. This technological advance represents the leasing technology industry’s first technology to support lessee self-service access to real-time account information via the Web or wireless PDA.

The remote access to account information is available 24x7 and meets banking industry standards. Transmissions are sent via 128-bit encryption and are further secured through log-in and password protection.

MyLeaseOnline is just one of a suite of new e-Leasing products from McCue Systems that were unveiled at this year’s Equipment Leasing Association (ELA) Annual Meeting. The company’s newly-enhanced e﷓Commerce platform not only supports lessee self-service but also gives lessors the flexibility to provide vendors and dealers and field sales force personnel access to lease account data via the Web or wireless PDA.

“We are very excited to be the first technology provider in our industry to offer the tools that lessors need to provide a new standard of customer service via the Web,” said John McCue, CEO and founder of McCue Systems. “Our customers in the leasing and manufacturing industries are looking for new ways to use the Internet as an information delivery tool and transaction medium. Our technology will help LeasePak® users achieve differentiation through superior customer service and responsiveness to customer needs,” McCue adds.

The software was made available October 26, 2001

About McCue Systems
McCue Systems has been offering business solutions to the leasing industry for over 30 years. Its flagship lease management system, LeasePak, is the solution of choice among leading banks, leasing companies, and financial institutions, accounting for over $100 billion in net assets, worldwide. With the recent release of its suite of Web-enabled e-Leasing solutions, McCue Systems leads the leasing technology industry in the development of e-Leasing tools to reduce operating costs and enable lessors to deliver superior customer service via the Web and wireless PDA.

The leasing experts at McCue Systems work closely with lessors to put the company’s 30-years-plus of leasing expertise to work, to streamline lease operations and enhance customer retention at every stage of the lease lifecycle.

Clients include Banc One, M/C Leasing, Volkswagen Credit, Bank of Hawaii, Bank of Tokyo/ Mitsubishi, Cisco Systems, ORIX / Australia and KeyBank.

 

 

( courtesy of ELAonline.com )

 

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Retail sales soar by record 7.1 percent in October; sales of cars lead the way

JEANNINE AVERSA, Associated Press Writer

 

 

WASHINGTON (AP) –

 

Consumers, drawn by favorable financing and heavy discounting, boosted retail sales in October by 7.1 percent, the biggest one-month gain ever recorded.

The jump in sales at the nation's retail stores came after consumers cut back on their spending in September, pushing sales down by 2.2 percent, the Commerce Department reported Wednesday.

 

Much of the strength in the October retail sales report came from a record 26.4 percent increase in car sales, which have been boosted by zero-percent financing and other incentives.

 

Consumers, whose spending accounts for two-thirds of all economic activity, have been a main force keeping the economy out of recession. But economic fallout from the Sept. 11 terror attacks have probably made a recession this year unavoidable, economists say.

 

In an effort to prevent the economy from sinking deeper into recession, the Federal Reserve has cut interest rates 10 times this year, with three of the reductions coming after the attacks.

 

Congress, meanwhile, is working on a plan to stimulate the economy through new tax cuts and increased government spending.

 

Commerce Secretary Don Evans, in an interview, called October's retail sales report encouraging. "It is a sign people are going to malls, shopping and participating in this economy," Evans said. "But we still have a long way to go."

The economy is very weak, underscoring the need for Congress to quickly pass a balanced plan to revive the economy, he said.

 

White House spokesman Ari Fleischer also cautioned against reading too much into October's retail sales numbers.

 

"Those particular numbers -- a big part of that was a result of auto sales that were tied to zero percent interest rates," he said. "So I think it's too soon to judge any long-term conclusions from it."

 

The economy shrank at a 0.4 percent rate in the third quarter and many economists are predicting an even bigger drop in the current quarter, thus meeting a common definition of a recession: two consecutive quarters of declining economic output.

With unemployment rising and fears about anthrax in the mail and further terror attacks, economists worry that consumers might pull back, making the economy even weaker.

 

Still, economists are hopeful that the Fed's aggressive rate cuts along with the economic stimulus being contemplated by Congress will lead to a rebound next year.

 

On Wall Street, the strong retail sales report lifted blue-chip stocks. The Dow Jones industrial average gained 30 points in afternoon trading.

To revive sagging sales, retailers have heavily discounted merchandise and offered other incentives. Car makers and dealers have provided free financing, which was a big factor in soaring car sales last month, economists say.

The 26.4 percent jump in car sales in October followed a 4.5 percent decline in September.

 

Excluding car sales, overall retail sales in October rose by 1 percent.

Sales at clothing stores increased by 6.9 percent, erasing a 5.9 percent drop in September.

 

At building and garden supply stores, sales rose by 2.8 percent in October, after falling by 2.6 percent. At health and beauty stores, sales went up by 1.7 percent, after a 0.3 percent rise.

 

Sales of sporting goods, books and music rose by 3 percent in October, following a 2.2 percent decline. Sales of electronics and appliances rose by 0.7 percent, after a 1.4 percent drop.

 

Bar and restaurant sales grew by 1.4 percent, a month after falling 2.5 percent.

Sales at furniture and home furnishing stores, however declined by 0.5 percent, after an even bigger 4.2 percent decrease. Sales at gasoline stations fell by 6.4, reflecting lower prices at the pump, following a 2.8 percent increase.

The 7.1 percent increase in total retail sales in October was the largest since the government began keeping retail sales records under the current classification system in 1992.

 

Last week, the nation's biggest retailers reported generally disappointing sales. But discounters and other value-oriented stores continued to be the beneficiaries of consumers' frugality

 

 

Electronic payments gaining on check use as Americans turn to credit, debit cards

 

 

By Jeannine Aversa

ASSOCIATED PRESS

 

 

WASHINGTON – Americans' use of credit cards, debit cards and other electronic payments is gaining fast on traditional checks.

Consumers and businesses write 49.1 billion checks a year, an increase of 53 percent from 32 billion of 1979, the Federal Reserve said in studies released Wednesday.

Over the same period, the number of transactions involving electronic payments, including credit cards and debit cards, rose from 5 billion to 30 billion, an increase of 500 percent, Federal Reserve officials said. A very small portion of the transactions involved payments over the Internet.

"We believe the results clearly paint a picture of a payments system in migration," said Fed Vice Chairman Roger Ferguson. "The data show strong growth in electronic payments since the early 1980s and lower than expected check volumes."

The big jump in electronic payments reflects the ever-increasing role of technology in the retail, financial and banking businesses, economists said.

"Businesses have adopted technologies that have made it more convenient for consumers to purchase goods," said Richard Yamarone, economist at Argus Research Corp. "Rather than writing a check, which can require several forms of identification, a cumbersome five-minute process, consumers can swipe a card."

To some extent, Americans are feeling more comfortable about using certain electronic payment options, such as debit cards, Yamarone said.

Checks now account for roughly 60 percent of all payments in the United States that do not involve cash, compared with 85 percent in 1979. Electronic payments account for 40 percent of total noncash payments, compared with roughly 15 percent in 1979, officials said.

Fed officials pointed out that in 1979 debit cards did not exist and a national network of electronic clearinghouses, called the Automated Clearing House, was in its infancy. That network is mostly used for moving income payments, such as preauthorized payroll checks, but also for debit payments, including mortgage payments.

"We clearly see that electronic payments are taking a strong hold of the market and are poised for significant growth in the next few years," said Cathy Minehan, president of the Federal Reserve Bank of Boston.

Other findings from the Fed's studies:

–Consumers write about 50 percent of all checks and businesses receive about half of all checks. About one-quarter of the checks are written to pay bills. The second biggest use – 19 percent – is for a purchase.

–The average check value is $965, compared with $757 in 1979.

–The 49.1 billion checks currently written are worth nearly $48 trillion a year. That is up 32 billion checks valued at $24 trillion in 1979.

–The 30 billion electronic payment transactions in the United States have a value of more than $7 trillion. Credit card transactions represented about half of those electronic payments – 15 billion – worth $1.23 trillion. Debit cards came in second place with 8.3 billion transactions valued at $348 billion.

Approximately 1,300 financial institutions, including banks, thrifts and credit unions, responded to the Fed's three commissioned surveys that examined methods and volumes of retail payments.

The Fed said the surveys were the most comprehensive look into the payments system since a 1979 study. The Fed plans additional studies on the topic every two to three years.

  

On the Net:

Federal Reserve: www.federalreserve.gov

 

               Friday---Odds and Ends

 

              Copier Leasing----

 

I loved the copier leasing one!  But he forgot that the deal had to be

funded tomorrow!

 

Frank Latourell fml@ravefinancial.com

 

~~~ 

 

Back to Vendor/Salesman SPIFFS. I have several thought that I want to

share. First of all, American Express is offering up to 15 points! I am

originally from Pennsylvania and during the late 60's and early 70's Disc

Jockeys for radio stations in the Philadelphia area were rewarded by record

companies were REWARDED for playing certain songs by certain artists, with

money, cocaine and prostitutes. This was the PAYOLA scandal and is very

illegal in Pennsylvania. I was warned by an Attorney friend of mine from

Pennsylvania that SPIFFS to salesmen and Vendors in Pennsylvania could fall

into this category!

  Secondly, when you use a SPIFF to get business from a salesman or vendor,

you have the same problem that governments encounter when using mercenaries

to fight a war. Mercenaries have been known to switch sides in a war, when

offered higher pay by the other side. SPIFFS just make a WHORE relationship

with the vendor or salesman, who will abandon you when someone offers a

larger SPIFF. You worked for your commission; don't give it away. If you want

to do volunteer work, the Salvation Army is recruiting!

  Lastly, SPIFFS just keep salesman and vendors in business who can't sell.

As Darwin proved, the fit survive! Most Vendors work on margins of 30%* or