Monthly interest

Does this sound just like the controversy over regulation of ATM fees or what?

Should Congress protect credit card users from being penalized for paying their credit card bills in full each month? In a third quarter Economic Review article, "Do Consumers Really Want Credit Card Reform?" Kathryn L. Combs and Stacey L. Schreft take a detailed look at repeated efforts by Congress to protect consumers by reforming credit card pricing, including bills introduced earlier this year to put legal restrictions on how credit card issuers set fees and account terms.

Combs and Schreft show that the effects of pricing restrictions depend on the many price terms and product features that determine a credit card's true cost to consumers, and on industry characteristics that determine how card issuers set account terms.

Combs, an associate professor in the Graduate School of Business at the University of St. Thomas, St. Paul, Minn., and Schreft, a senior economist at the Federal Reserve Bank of Kansas City, say that "consumers should think twice before asking for pricing restrictions on credit cards." The authors find that pricing restrictions on credit card issuers are likely to reduce the availability of credit, at least to some consumers, and might not even bring about lower prices for credit card accounts. With pricing restrictions, consumers are definitely better off only under very unusual circumstances - circumstances that do not prevail today.

The article and the entire issue of Economic Review, the Kansas City Fed's research journal, are available on the bank's Web site at www.kc.frb.org.

Do chief executive officers of vendor firms exhibiting at banking trade shows show up to mingle with key clients and prospects?

If not, maybe they should be encouraged to do so. Or maybe they will soon.

In any event, according to a new study by the Incomm Center for Trade Show Research, even though CEOs' schedules are more demanding, their participation in trade shows is increasing.

In 1992 82% of CEOS attended trade shows. By 1996 the number had climbed to 89%, and last year 91 % of CEOs in the survey attended trade shows.

"What has changed," explains the Chicago-based center's Allen Konopacki, "is that CEOs in 1996 focused more on visiting shows to assess the industry and competition. In 1999 CEOs used shows to sell to key customers."

Another key finding, Konopacki said, is that more CEOs from toptier, multi-billion dollar corporations are visiting trade shows.

It looks like banks are losing another piece of business to nonbank competitors. The United States Mint first released its new Golden Dollar Coin last month through a promotion with General Mills in boxes of Cheerios, which began appearing on grocery shelves shortly after the first of the year. Every 2,000th box of specially marked boxes of Cheerios cnotained a new Golden Dollar, and every 4,400th box contained a certificate redeemable for 100 Golden Dollars.

Oh yes, banks eventually got a piece of the action when on Jan. 27 the Federal Reserve banks began shipping the coins to financial institutions.

But there's more to the story. Wal-Mart Corp. entered into an agreement with the Mint whereby Golden Dollars were to be offered as change at all 3,000 Wal-Mart stores beginning Jan. 30. It's all part of an unprecedented public awareness, public relations and advertising camaign in support of the Golden Dollar, the Mint explained.

Which seems to be working. Initial demand was so strong that the Mint moved up its release date by a month to fulfill early orders from financial institutions.

"By March 1," said Mint Director Philip N. Diehl, we will have shipped over 200 million Golden Dollars, or four times the total annual demand for the Susan B. Anthony dollar

"By March I", he added, "we will be shipping 4.5 million Golden Dollars a day to meet anticipated demand. This strong market response is the direct result of our efforts to design an attractive product that works for American consumers and American business."

In case you haven't seen it or a likeness thereof, the Golden Dollar on the heads side features the likeness of Sacagawea, the young Shoshone woman who assisted Lewis and Clark on their exploration of the Louisiana Purchase almost 200 years ago.

The reverse (tails) side of the coin features a soaring bald eagle and 17 stars, one for each of the states at the time of the Lewis and Clark expedition.

If you're serious about Internet banking, consider this: the Internet dot com domain name/web address "Bankofthe Internet.com" is for sale. So is "BankoftheInternet.org" and "BankoftheInternet.net."

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"The BankoftheInternet.com brand name could save millions of dollars in promotion/marketing costs by conveying immediate credibilitiy and confidence to online consumers.

"The web address continues to receive daily hits from people looking for online banking services."

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