The growing use of branchless banking, including mobile phone banking, is inevitable in most countries. But it's far less certain whether large numbers of the unbanked poor will use these alternative channels for financial services beyond payments, such as savings and credit. So says "Scenarios for Branchless Banking in 2020," a new report from CGAP, a microfinance group based at the World Bank, and the U.K.'s Department for International Development (DFID). READ MORE

The US Senate Committee on Banking, Housing and Urban Affairs is holding a hearing this afternoon on the subject of "Protecting Consumers from Abusive Overdraft Fees: The Fairness and Accountability in Receiving Overdraft Coverage Act". The witnesses will be: Mr. Mario Livieri, Consumer, State of Connecticut; Mr. Michael Calhoun, President, Center for Responsible Lending; Mr. Frank Pollack, President and CEO, Pentagon Federal Credit Union; Mr. John Carey, Chief Administrative Officer, Citibank NA; and Ms. Jean Ann Fox, Director of Financial Services, Consumer Federation of America. READ MORE

Yesterday and today, the Seattle Times ran a two part series about its former home town bank Washington Mutual titled "Reckless Strategies Doomed WaMu". In a word (actually two words!), it was the: Option ARM.

Lieff Cabraser Heimann & Bernstein, LLP today announced the filing of a series of nationwide class action lawsuits against Bank of America, Wachovia, U.S. Bank, JPMorgan Chase and Citibank in the United States District Court for the Southern District of Florida in Miami for abusive overdraft fees. READ MORE

Senator Chris Dodd has announced the The Fairness and Accountability in Receiving (FAIR) Overdraft Coverage Act, a new bill he is introducing to "protect Americans from excessive checking account overdraft fees." READ MORE

Plastyc has introduced iBankUp, a new online banking service that enables "GenY consumers to save money and keep their credit history clean by giving younger, Web-savvy people constant financial oversight and control with no risk of incurring credit card debt or overdraft fees." READ MORE

Last week, WAMU's DIane Rehm hosted a program focused on Consumer Credit Protections - including overdraft fees. Participants included Kathleen Day, Center for Responsible Lending, Diane Casey-Landry, Chief Operating Officer, American Bankers Association, and Nancy Trejos, Washington Post Personal Finance Writer. I was surprised at some of the lack of understanding about how debit cards actually work - as expressed by one participant in particular on this program!

In his weekly column titled "Have Banks No Shame?" in Saturday's New York Times Business section, Joe Nocera writes about the the establishment of a new consumer financial protection agency.

Nocera writes: "The real reason current regulators don’t pay more attention to consumer problems is not that they are evil (well, mostly they’re not), but that they have another mission that takes priority. They are charged with insuring the safety and soundness of the banking system."

He concludes: "The sooner we can pass the thing, the better."

The Center for Financial Services Innovation (CFSI) has announced that it will welcome more than 30 senior executives from a broad cross-sector of the financial industry in Chicago today for a joint meeting of its Innovators and Responsible Credit Roundtables. The gathering seeks to provide insight and actionable ideas for companies, advance their individual efforts in developing new projects and business models, and identify opportunities for industry-wide action. READ MORE

The Center for Responsible Lending has published a new study finding that US banks and credit unions collected nearly $24 billion in overdraft fees last year, an increase of 35 percent from two years earlier. READ MORE

The Microsoft “Millennials in Financial Services” survey, conducted by KRC Research of Washington, D.C., found that millennials born between 1981 and 2000 have less trust in banking and investment firms since the bailouts of AIG and global banks a year ago.

Millennials surveyed also believe that the U.S. financial industry is out of touch with the way they would like to communicate with their financial institutions. Based on the findings, millennials would prefer to communicate with their financial institutions through new channels including live online chats with banking representatives, personalized Web portals and financial applications for smartphones. READ MORE

Bankrate.com has published results from a new study of bank fees showing that the costs of checking accounts have risen again this year to an all-time high. Bankrate's 2009 Checking Study details the average fees associated with using and maintaining an interest bearing account, including bounced check fees, ATM surcharges, and monthly services fees, plus tips on how to avoid them. READ MORE

The rage around bank overdraft fees continues with an article titled "Overdraft 'Protection' Is Anything But" by Michelle Singletary in today's Washington Post.

She writes: "Clearly, people should be more responsible. But once again, financial services institutions have crossed the line of fairness. And to be honest, the federal government has helped them along. The federal agencies that regulate the industry determined several years ago that overdraft protection programs were not extensions of credit, a ruling that was ridiculous."

The financial crisis exposed risk issues of an unprecedented scale for the banking industry and has made increasing the operational efficiency and risk management of payment systems a priority for banks, according to senior regulators, banking executives and financial technology company executives interviewed for a new white paper issued by KPMG International.

The KPMG white paper – entitled “The Beating Heart of Banking: Insights into Global Payments” -- also notes that payments remains a revenue-generating business for banks as the volume of payments is growing worldwide, making up for the decrease in the unit value of these transactions as consumers manage their cash more carefully and make more, but smaller purchases. READ MORE

In this evening's program, the NewsHour with Jim Lehrer featured a segment titled "Banks, Customers Face Changes to Debit Card Overdraft Fees". The NewsHour's Jeffrey Brown interviewed Ron Lieber from the New York Times - here's the transcript.

In an article titled "Chase and Bank of America Revise Fee Policies", Ron Lieber writes for the New York Times about announcements from Bank of America and Chase regarding changes both banks are planning to their overdraft fee policies.

In a press release, Bank of America announced changes to be implemented October 19 including not charging overdraft fees when a customer's account is overdrawn by a total amount less than $10 for one day, not charging overdraft fees on more than four items per day and making it easier to opt out of overdrafts altogether. Next June, the bank plans additional changes including providing customers a choice with respect to opting in or out of overdraft capability.

According to Lieber's reporting, Chase is planning changes in the first quarter including not charging a fee when the overdraft is for less than $5 and not sorting items in descending amounts prior to posting - a technique that maximizes the overdraft fees charged and has drawn criticism from consumer groups. Chase also plans to allow its customers to opt out of overdraft coverage.

In an article titled "Democrats Target Bank Overdraft Charges", Binyamin Appelbaum and Nancy Trejos write for the Washington Post about how a backlash against the banks continues with congressional Democrats planning a "crackdown on overdraft fees" - most of which are associated with debit card transactions.

We've been doing research into the use and application of social media to the business of financial services. We recently came across this updated "Did you Know" video put together by XPLANE that really helps frame the environment we're dealing with. Enjoy - and, if you'd like to talk about social media and financial services, get in touch. Google me!

[Hat tip to Presentation Zen!]

In an article titled "Sticking with R&D, Even in a Downturn", Maria Aspan writes for the American Banker about US Bank's continuing focus on payments innovation.

"We can pilot things across both ends of the spectrum. We can issue and acquire in kind of a small pilot environment" without overspending or overextending the company's resources", Pamela Joseph, its vice chairman of payment services said.

In an article titled "Overspending on Debit Cards Is a Boon for Banks" in today's New York Times, Ron Lieber and Andrew Martin write about the fees banks charge on debit card overdrafts - reporting that "this year alone, banks are expected to bring in $27 billion by covering overdrafts on checking accounts, typically on debit card purchases or checks that exceed a customer’s balance."

Non-cash payment volumes continued to grow in 2008 after an increase of 8.6 percent globally in 2007 to 250 billion transactions, according to the World Payments Report 2009, released today by Capgemini, RBS and Efma. The use of cards continues to be the single strongest driver for this growth with llobal card transactions (credit and debit) growing 14.5% in 2007 and 11.2% in 2008. READ MORE

In an article titled "Banks 'Too Big to Fail' Have Grown Even Bigger", David Cho writes for the Washington Post about how the banks in the US who regulators thought were "too big to fail" have, ironically, become even bigger as a byproduct of the economic crisis. ""The oligopoly has tightened," says Mark Zandi, chief economist of Moody's Economy.com.

The New York Times today has an editorial titled "Debit Card Trap" on the subject of the overdraft fees that many banks collect on debit card transactions when there aren't sufficient funds in the consumer's checking account. The Times cites research by Moebs Services finding that banks in the US "will earn more than $38 billion this year from overdraft and bounced-check fees. Moebs also estimates that 90 percent of that amount will be paid by the poorest 10 percent of the customer base."

The Times is urging that regulators adopt new rules - currently under consideration by the Fed - that would require consumer opt-in and would require notification in real-time when a debit card charge is going to result in an overdraft fee being charged.

On its website, PBS has made available for viewing both a two hour and four hour (four one hour programs) versions of Niall Ferguson's The Ascent of Money video series. Ferguson is the Laurence A. Tisch Professor of History at Harvard University and William Ziegler Professor at Harvard Business School.

Ferguson's book is also available available in the Payments News Bookstore on Amazon.com: The Ascent of Money: A Financial History of the World.

Bankrate has announced that it has entered into a definitive agreement to be acquired and taken private by funds advised by Apax Partners, a global private equity firm.

Every once in a while we come across a new book that we think will be of interest to the payments professionals among our readership. (Note: you can find a selection of all of our prior book recommendations in our PaymentsNews Bookstore on Amazon.com).

The book "details how Williams painstakingly defeated the anti-forging features of the New Note, how Williams and his partner-in-crime wife converted fake bills into legitimate tender at shopping malls all over America, and how they stayed one step ahead of the Secret Service until trusting the wrong person brought them all down. A compulsively readable story of how having it all is never enough, The Art of Making Money is a stirring portrait of the rise and inevitable fall of a modern-day criminal mastermind."

It's a great read! Also available in a Kindle edition from Amazon.com. If you're interested in learning more about the book, you should listen to this excellent interview of the author by KQED's MIchael Kransny last week and this article on Time.com.

The US House Committee on Financial Services is holding a hearing in Washington today on the Obama administration's financial regulatory reform proposals. A number of speakers from the banking industry are testifying at the hearing.

According to research conducted by Moebs Services as part of its 22nd annual survey, "the national median for overdraft (OD) fees on consumer checking accounts, debit cards and ATMs increased to $26 per incident in 2009 from $25 per incident in 2008, a 4 percent increase, led primarily by Wall Street Banks – those with assets of more than $50 billion. These findings are the result of a just-completed nationwide survey of more than 2,000 commercial banks, savings institutions and credit unions." READ MORE

In an article title "Not-So-Personal Banking", Laura Lorber writes for the Wall St. Journal about more small businesses avoiding trips to the bank to deposit checks they've received - instead using remote deposit capture to transmit an image of the check electronically to their bank.

Remote deposit capture is the equivalent of the electronic draft capture POS terminal that moved the credit card world from paper to electronics over 20 years ago - finally coming to the world of checking. One of the implications of RDC, of course, is that the local bank branch becomes less important. Said differently, banks can now market services to small businesses outside of their branch footprint.