Ent selected as official UCCS ‘banking’ provider

Filed under: Banking & Finance |

Ent Federal Credit Union, the region’s largest financial institution, has signed a deal with the University of Colorado at Colorado Springs to exclusively provide banking services on the college’s campus.

As part of the agreement, Ent will build a service center at UCCS and students and faculty members will be issued identification cards that also can be used as ATM cards.

The cards, which will be called Lion OneCards, will also allow access to library materials, student housing, athletic and performing arts events, shuttle buses and university meal plans.

The first cards will be issued to students registered for the fall semester.

While college officials said the primary benefit will be having one card to access nearly all campus services, Ent President Charles Emmer said the partnership is an opportunity for the credit union to promote financial literacy.

Ent will build a full-service financial center on the first floor of the UCCS University Center, through which the credit union will provide student internships, scholarships and support for campus capital construction projects.

Ent, which reports $1.9 billion in assets, was selected from several financial institutions that bid for the project.

FDIC slaps moratorium on ILCs

The Federal Deposit Insurance Corp. Board of Directors has placed a six-month moratorium on applications for deposit insurance from industrial loan companies.

Retailers such as Wal-Mart and The Home Depot who have applied for ILC status frowned on the decision.

FDIC officials said the moratorium is a response to lawmakers who wanted more time to consider legislation that would block commercial companies from owning the corporations.

The growth of the ILC industry and the trend toward commercial company ownership of ILCs has many in the banking industry uneasy about their stability.

There are 61 ILCs with a total of about $141 billion in assets and $98 billion in deposits. Thirty-three are based in Utah, one of only seven states that grant charters for such banks.

The banks are allowed to issue credit cards, take deposits and make loans. They cannot offer standard checking accounts if their assets exceed $100 million.

In addition to Wal-Mart and The Home Depot, companies awaiting FDIC approval for ILCs status include The Blue Cross and Blue Shield Association, Ford Motor Co., DaimlerChrysler and information services provider Ceridian Corp.

The moratorium provides a limited exception only in the unlikely circumstances in which there is a risk to an FDIC-insured institution or to the insurance fund, or if the mission of the FDIC is impaired. The moratorium expires Jan. 31.

Wachovia drops fees in lieu of rewards program

At a time when credit card providers are trying to one up each other with tantalizing rewards programs, Wachovia Corp. returned to the card business this week with an unprecedented strategy.

It will offer cards with no rewards programs – and no fees, either.

Well, almost no fees.

The corporation’s new Visa cards will feature fairly lenient rules and penalties, including absolution for one late payment every 12 months, executives said.

The strategy is getting a nod from analysts, who say it appears to be “well-tailored,” according to The Nilson Report, a financial trade publication.

Late fees and penalty fees have proven to be a big money maker for financial institutions during recent years. A number of banks that reported doubled and even tripled earnings during the most recent quarter cited increases in fees as a weighty factor for the gains.

Wachovia hopes the lower fees will be seen as a customer friendly move that will lure those disgruntled by excessive fees.

Wachovia sold its credit card business in 2000 during a restructuring. It relied on MBNA to issue the cards until Bank of America announced it would buy MBNA. That’s when Wachovia discovered its largest rival would be serving many of its best customers.

So, for a cool $100 million, Wachovia broke the MBNA contract and negotiated the right to offer new cards to many of the customers who currently hold Wachovia-brand MBNA cards.

And, sticking with the “customer friendly” approach, Wachovia will not hype the program with pomp and flash. They’ll instead talk directly to Wachovia customers about their card program.

Parker Brothers debit cards

Parker Brothers has made its own venture into the credit card business with its new, more modern version of the classic board game Monopoly.

The game will replace paper play money with plastic Visa debit cards.

Want to buy a Park Place hotel? Swipe your card here please.

An electronic funds calculator keeps a tally of players’ balances.

There’s no word yet whether overdraft protection will be offered with the cards.

CNB opening in Falcon

Colorado National Bank is expanding in Falcon. The bank broke ground this week on what will be its fourth branch in the Pikes Peak region.

Bank officials said the new location will be a full-service branch with drive-thru bays. There also will be additional space available for another business to rent.

The branch is expected to open in January.

Rob Larimer covers banking and finance for the Colorado Springs Business Journal.