A unanimous U.S. Supreme Court ruling this week that the parties to joint ventures aren’t engaging in price fixing as long as the joint venture itself is competing in the open market is unlikely to derail the many class action lawsuits over interchange being fought in Federal court.

Continue reading "Supreme Court Ruling Just Another Factor in Interchange Suits" »

In the latest in what seems an unstoppable march, DataTreasury Corp. settled its outstanding patent infringement litigation in the U.S. District Court for the Eastern District of Texas with NCR Corp., paying DataTreasury a fee and agreeing to license the Melville, L.I. company’s check imaging technology. DataTreasury said NCR had been infringing on DataTreasury’s patent rights. It’s the latest in a series of settlements stemming from a number of similar suits that DataTreasury filed in 2002.

DataTreasury, which has already settled its litigation against JP Morgan Chase & Co., Ingenico Group, and other firms that it says also infringed on its patent rights, is still suing several other big financial services firms-- including First Data Corp., Citigroup, SVPCO and Bank of America, among others—on the same grounds.

Continue reading "DataTreasury, NCR Settle Patent Infringement Case" »

Germany’s federal monopolies body, the Bundeskartellamt, received a legal complaint from the German Retail Association, alleging that interchange fee charged MasterCard and VISA, which average 150 basis points, prevents widespread credit card acceptance in Germany.

In a statement, the Association, a lobbying group, said that credit card payment account for only 5 per cent of all retail sales in Germany. The complaint calls on the Bundeskartellamt to cut interchange fees and to increase payment card transparency. It claims these steps will improve competition in the credit card sector. Spain, says the group, has ordered a step-by-step reduction of interchange to between 0.54 per cent and 1.10 per cent by 2008.

This year we can expect the computer security arms race to keep scaring the daylights out of anybody who understands what’s going on. Also: Look for confusion in the financial community about complying with the Federal Financial Institutions Examination Council’s (FFIEC) mandate to install two-factor authentication by year-end.

The main story on the hacking front is the upward spiral of money and resources on the black hat side, and the vigorous defense mounted by the white hats, now that real criminals are on the scene, says Kawika Daugio, director of Northeastern University’s information assurance program. “We’ve seen more and more professionals involved,” he says. “It’s the standard trend because, as the difficulty [to successfully attack a protected network] increases, the scale required and the sophistication required to make it pay, go up.”

Continue reading "FFIEC Will Cause Financial Network Security Confusion" »

Get ready for Patriot Act II, says Peter Djinis, a former FinCEN official now practicing law in the Washington, D.C., area: The reach of U.S. anti-money laundering (AML) regulations will keep growing in 2006—from banks, brokerage houses and the like, which have been under the AML umbrella for years, and into industries like insurance, gems and precious metals, hedge funds, investment advisors, and off-shore real estate transactions.

The source of life insurance policy payments, for instance, is about to get a close look, and the ingenuity of bad guys is to blame. Djinis mentions a case broken by the U.S. Customs Service in 2003 in which Columbian drug cartels were buying U.S. life insurance policies with offshore money, cashing them out for near-face value in the U.S., and then either getting the money directly, or having it paid to third parties. “The paper trail was all messed up—(criminals) had all sorts of explanations of why they had that money, and none of the policies showed the illegal nature of the funds that bought the policies,” he says.

Continue reading "Federal Anti-Money Laundering Regulations" »

Data protection is probably the biggest payments-related portion on Congress' 2006 plate, says Nessa Feddis, the American Banker's Association's senior federal counsel.

Whatever law eventually emerges-as many as six were proposed last year-the topic was a natural for Congress, which has had to at least appear to respond to last year's flood of data breaches. An industry-supported bill sponsored by Sen. Jeff Sessions was passed by the Senate Judiciary Committee in October (see Electronic Payments Week, Oct. 25, 2005), but it died  before it could come to a vote. "The enthusiasm for data protection [legislation] was a bit complicated by the fact that there are six committees involved," says Feddis.

Continue reading "Pending Financial Data Protection Legislation" »

To thwart spoofs and look-alike competition, make it a priority to register common variations of your domain name, including typos (see table). For most banks, the cost of registering the entire list of domain names is less than $1,000 per year (.com/.net/.org are $35 each/yr). It’s a very low-cost insurance policy against spoofs and hacks for an example of what could happen).

If someone already registered one of these domain names, buy it from them. Send the owner a letter or email thanking them for registering the domain name. Then politely explain that even though you own the trademarked name embedded in the URL, you would be happy to send them a finder’s fee (a couple hundred dollars—more for big banks, less for smaller banks/CUs) to transfer ownership to you by a certain date, with no further negotiations. Explain, but don’t threat, that if the seller insists on negotiating a better price, your legal department would have to get involved and the finder’s fee offer would be withdrawn.

Domain Insurance for Acme Bank

Source: Online Banking Report, 2/00

*register your domain name in every country you operate in

**assumes publicly traded under AMBK; Net.B@nk, links its investor relations area to its symbol www.ntbk.com

If you need to keep close track of mortgage regulation changes, then <www.allregs.com> from the Mortgage Resource Center may be just the answer. Here is one place that tracks all the opinions, proposals, regulations up for comment, and final regulatory decisions for the myriad governmental bodies watching over the mortgage industry. Basic information is free, but you’ll have to pay to get the detail.