By The Canadian Press - Wednesday, November 21, 2012 - 0 Comments
TORONTO – Canada’s largest banking group has dropped expiry dates and most of the…
TORONTO – Canada’s largest banking group has dropped expiry dates and most of the fees on its prepaid Visa cards in the wake of Finance Minister Jim Flaherty announcing plans to introduce new rules for the cards.
RBC Royal Bank (TSX:RY) said Wednesday it will continue to charge a one-time flat fee of $3.95 to issue the prepaid card but all the money loaded will remain available to make purchases. Its prepaid cards will continue to show an expiry date but a new card can be requested at no charge if a balance remains after that date.
Flaherty said last month that the government believes it’s not appropriate for consumers to lose money if a gift card expires after a period of time. He said the government wants better disclosure of the terms of conditions of prepaid credit cards.
Flaherty’s press secretary, Kathleen Perchaluk, issued an email statement saying the government would continue a “pro-consumer agenda.”
“We’re pleased to see some financial institutions pre-emptively apply our government’s new rules to protect consumers, we will continue to push a robust pro-consumer agenda on pre-paid credit cards,” Perchaluk said.
RBC said there will be no usage, maintenance nor inactivity fees for its prepaid cards, which come in denominations ranging from $25 to $500.
While still a small segment of the market, prepaid plastic has become an option for consumers without conventional credit or debit cards, young adults, and for parents who want to introduce their children to using credit while limiting the risk of theft and over-spending.
But the sector has faced criticism for exorbitant hidden fees that reduced the face value of prepaid credit cards. These can include monthly or annual fees, maintenance costs, as well as ATM charges.
The most notorious example occurred two years ago when Hollywood celebrity Kim Kardashian backed away from endorsing a prepaid card bearing her name after a public outcry over the card’s usage fees, including a close to $60 activation fee.
The card even grabbed the attention of the attorney general of Connecticut.
The new regulations in Canada would require an information box disclosing the fees displayed prominently on the exterior package and other documentation prior to issuance.
The Opposition has called the new rules a “small step in the right direction,” but charged that Flaherty was still ignoring the issues of sign up, usage and reload fees which could cost between $1 and $40.
By Andrew Stobo Sniderman - Friday, September 21, 2012 at 11:18 AM - 0 Comments
The saga of Paul Volcker, perhaps America’s lone unsullied statesman of finance and banking, unfolds in three heroic acts. First, he persuaded “Tricky Dick” Nixon to sever the link between the American dollar and gold in 1971, which ushered in the more sustainable (and, yes, often more unstable) world of floating currencies. Second, as chairman of the Federal Reserve, he stared down Jimmy Carter and Ronald Reagan to stop the devastation being wrought by inflation. Volcker was a Democrat, but that didn’t stop him from precipitously raising interest rates (and unemployment) six weeks before the 1980 elections. Sorry, Jimmy, but Volcker took orders from data, not politics. Reagan was happy to win the election with the inadvertent assist, but was rather less pleased when Volcker was similarly implacable for the next six years. Finally, in 2008, Volcker appeared at Barack Obama’s side to help rescue the financial system, with mixed results.
Silber, a professor at New York University, records what Volcker did, but also explains why, drawing on extensive research and 100 hours of interviews with Volcker. Silber does his best to make monetary policy debates seem as dramatic as they were consequential. This leads to some overwrought metaphors (the price of gold serves “as a carbon monoxide detector for inflationary expectations”), but mostly Silber succeeds in evaluating Volcker’s judgments over the years with clarity and without unnecessary reverence for a living legend.
By Luiza Ch. Savage - Monday, December 6, 2010 at 9:20 AM - 8 Comments
Despite historic successes—notably health reform—his popularity plummeted. Can the ‘great communicator’ fight his way back?
It was the best of times, and the worst. Barack Obama did what Democratic presidents have been trying and failing to do since Harry Truman: deliver the policy Holy Grail of health reform that will extend insurance coverage to most of the millions of Americans who don’t have it. No longer will Americans lose their coverage if they get sick, or go without it on account of a pre-existing medical condition, to name just a few changes the new law introduces. When Obama signed the bill into law on March 23, he used 22 different pens so they could be handed out as historic souvenirs and archived for posterity. “Today we are affirming that essential truth, a truth every generation is called to rediscover for itself, that we are not a nation that scales back its aspirations,” he declared. An open microphone caught Vice President Joe Biden summing the occasion up more succinctly, as he turned to the President and said, “This is a big f–king deal.”
Obama had other successes: getting Congress to pass financial reform legislation to protect credit card users and people seeking mortgages, and to oversee risk in the financial system and prevent another collapse. He successfully confirmed his solicitor general, Elena Kagan, to be a Supreme Court justice, giving the nation’s highest judicial body three sitting women judges for the first time in history. He pushed through an overhaul and expansion of federal student loans.
By Charlie Gillis - Thursday, September 30, 2010 at 9:40 AM - 0 Comments
If the economy is humming and inflation is in check, why have German voters soured on Angela Merkel?
On paper, it’s been a good year. Germany’s economy is cruising at an enviable clip. Employment is up, inflation is in check and Chancellor Angela Merkel is showing a talent for keeping her head while others about her are losing theirs. During last spring’s Greek debt crisis, for instance, the German leader proved just stubborn enough—exacting commitments from Greece to overdue financial reforms in exchange for a loan package that headed off financial crises across southern Europe. Some experts credit her with preventing a double-dip global recession.
Where, then, is the political payoff? Far from winning hosannas for their firm hand during choppy economic times, Merkel and her Christian Democrats watched this summer as their public support dwindled to record lows, raising questions as to whether Germans have turned their back on the girl from Brandenburg with the smiling eyes and iron fist. Polls taken over the summer suggest only 12 per cent of Germans are satisfied with the government’s performance, while Merkel herself has suffered her lowest personal approval ratings since she assumed office. “A lot of people are unhappy, and her leadership style is part of the problem,” says Gerd Langguth, a former member of the Christian Democrats and author of a biography of the 56-year-old politician. Suspicious of long-term vision yet shackled to deputies with their own ideological agendas, Merkel increasingly finds herself fighting internecine battles within her governing coalition, Langguth says, and each one has exacted a toll. “In Germany, no chancellor can expect people to follow her direction just because she tells them to. She’s learning what [Gerhard] Schröder and [Helmut] Kohl learned before her.”