Credit Card Interchange Fees Changes Announced + MORE Nov 4th

(Getty Images/Arda Guldogan)
If you’re interested in making money off of other people’s debt you may have an increased opportunity, at least if the Bank of Canada gets its way.
A recent article, written by Bank of Canada deputy governor Lawrence Schembri, pressed for risk exposure changes in Canada’s mortgage market. In particular, Schembri suggested that the creation of a private-label mortgage securitization market in Canada.
Private-label mortgage securities includes any mortgage product that does not conform to criteria set by A-list banks and the CMHC. As a result, these private-label mortgages carry a significantly greater risk. Examples of these mortgages include: low-doc (aka: Liar loans), 40-year mortgages, large loans (over $415,000 in the US, over $1-million in Canada), B-lender loans. Of course, these types of loans may already seem familiar given that they, along with other private-label mortgage securities, played an integral role in the 2009 credit crisis…

UPDATE: Visa and MasterCard have announced their proposals to reduce merchant interchange fees to an average of 1.5 per cent. Together, the two proposals will equal a 10 per cent reduction in processing fees for merchants. Canadian Minister of Finance, Joe Oliver, stated he was pleased with the actions taken, saying, “As a result of the voluntary proposals, there is no need for the Government to regulate the interchange rates set by the credit card networks.”
The proposals from Visa and MasterCard will:

Voluntarily reduce their respective credit card fees for consumer cards to an average effective rate of 1.50% for a period of five years.
Ensure that all merchants receive a reduction in credit card fees.
Provide a greater reduction for small and medium sized enterprises and charities, which have the least amount of bargaining power.
Require annual verification by an independent third party to ensure compliance.

The new fee structure will be implemented by April 2015. Currently, American Express is not participating in the voluntary reduction, though Oliver stated he was “pleased to see that American Express has committed to maintaining its current business model…

OTTAWA – Canadian food banks are wading into the hot political debate over how best the federal government can help families with kids: give them tax breaks, as the Conservatives are doing, or invest in regulated child care, as the NDP proposes.
In its annual HungerCount report, Food Banks Canada comes down squarely on the side of the NDP.
It says the use of food banks remains 25 per cent higher than it was before the devastating global recession in 2008 and that 37 per cent of those helped are children.
According to the report, almost half of the households helped are families with kids and nearly half of those are two-parent families.
Among other recommendations, the report says the federal government should replace “the current alphabet soup” of child tax benefits with a new child well-being benefit that targets the most vulnerable families.
And it calls on federal and provincial governments to invest in predictable, stable funding for affordable, regulated child care, enabling parents to enter or remain in the workforce…

Central banks have been printing money by the truckload to prop up their economies. How long can inflation remain at bay?

Federal Land Banks created in 1916 were the Fannie Mae model. They too went belly up.