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Thursday, February 9, 2012

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Payment Cards Center

The Payment Cards Center provides meaningful insights into developments in consumer credit and payments that are of interest not only to the Federal Reserve but also to the industry, other businesses, academia, policymakers, and the public at large. The center carries out its work through an agenda of research and analysis as well as forums and conferences that encourage dialogue incorporating industry, academic, and public-sector perspectives.

What's new

October 2011

Fall 2011 Update

In this edition of Update we welcome two new employees to the center and say good-bye to two colleagues. We also introduce the Center Stage column. This column will feature work from center staff. Industry Specialist Susan Herbst-Murphy contributed the inaugural article by highlighting her July 2011 conference, Government Use of the Payment Cards System: Issuance, Acceptance, and Regulation. This issue of Update also features a number of PCC workshops and discussion papers, as well as works published by two of the center's visiting scholars.

September 2011

Workshop Summary Published: Insolvency Risk in the Network-Branded Prepaid-Card Value Chain (581 KB, 45 pages)

On March 18, 2011, the Payment Cards Center hosted a workshop to examine the implications of insolvency in the network-branded prepaid-card value chain, to review how market participants have responded to this risk, and to discuss controls the industry has developed to mitigate and address these challenges. Kirsten Trusko, president of the Network Branded Prepaid Card Association (NBPCA); Terry Maher, partner at Baird Holm LLP and general counsel to the NBPCA; Jeremy Kuiper, managing director of the Bancorp Bank; and Ted Martinez, head of Visa’s North America credit settlement risk team, led the workshop. This paper summarizes the information presented at the workshop, including the ways in which consumers and businesses are protected from the insolvency of the issuing bank or a key participant. In addition, this paper highlights practices that have been developed in the industry to mitigate this risk.

August 2011

Discussion Paper Released: Meeting the Demand for Debt Relief (581 KB, 45 pages)

Each year, millions of financially distressed consumers in the U.S. face a difficult choice among the debt relief options available to them. This paper describes the options available to borrowers who seek assistance in managing their debts and discusses the information and incentive problems associated with these options. It also reviews the trends that contributed to the breakdown of the repayment framework and the responses to these trends. Among the responses is a reconsideration of the regulatory structure of the debt relief industry. The paper concludes with a discussion of the importance for debt relief providers and policymakers to evaluate the efficacy of workout options and to develop a deeper understanding of how consumers make decisions about incurring and repaying debt.

• Last update: October 19, 2011