Executive Summary - 14 May 2008

By Christian Mullins

Executive Summary:

Mixed news in the mortgage market Tuesday. Real estate data firm RealityTrac reported that April foreclosures were up 65% over the previous year, and up 4% from March, with a total of 243,353 filings. On the positive side, mortgage applications are up for the second consecutive week, largely benefiting from lower national rates on fixed 30 year loans, which dipped to 5.82% (6.13% this week last year).

Later this summer, the Federal Trade Commission will hold a Town Hall meeting to discuss consumer protection issues regarding contactless payment systems. While the number of contactless purchases is expected to exceed 24 million in 2008, there was a report released in December showing that the encryption could be cracked with $1,000 worth of equipment, causing some consumer backlash, particularly in Boston, where the story was reported in detail.

The House of Representative Judiciary Committee is scheduled to hear testimony on The Credit Card Fair Fee Act, under which interchange rates and terms would be determined by a panel of Electronic Payment System Judges. CUNA has stated they plan to oppose the bill, stating their support for a free market system. Articles with a more thorough pro and con viewpoint are available.

Even though the Federal Reserve has cut interest rates from 5.25% to 2.00% since mid-September, Fed Chairman Ben Bernanke concedes that the credit crisis is not yet over. A primary concern now is that the market may continue to slump while rising energy costs will drive inflation pressures upward. Moving the rate either way could hurt the economy, as could a stabilization of the rate. In short, there are too many determining factors for a consensus projection.

Robbed:

• Fibre FCU, West Kelso, Washington, Tuesday. A man wearing a ski mask and toting a semiautomatic handgun lined up and pepper sprayed everyone in the credit union before leaving with an undisclosed amount of cash.

Arrested, Arraigned, Charged, or Sentenced:

• Police in Berkeley, California arrested four men in connection with the robbery of Cooperative Center FCU Tuesday. The four men robbed the CU using a takeover style and punching a female teller in the back of the head. Three of the men were caught with $6,000 and a cache of guns after police chased down their car. The fourth man was arrested outside an apartment complex later that afternoon.