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Category: Traditional Systems

MasterCard to roll out program allowing transgender people to choose name on credit card

MasterCard has released details of “True Name,” a program that allows transgender people to use their chosen name on debit and credit cards, even if their legal name has not been changed. The company announced two institutions with whom it is partnering on the initiative: BMO Harris Bank in Chicago, and Superbia, a credit union focusing on LGBT customers.

Speaking to the New York Daily News, Cheryl Guerin, Mastercard’s executive vice-president of marketing and communications, said company research found that a third of Mastercard’s customers who have discrepancies between the name on their cards and their gender identities have had negative experiences as a result.

“We learned that there was a pain point with a product, with this particular community,” Guerin said. “And the goal was to fix it. We want everybody to feel a sense of pride in the cards they have. And we want everybody to feel safe and comfortable. We believe that everyone should feel accepted.”

MasterCard first revealed True Name this past summer to coincide with World Pride, an event marking the 50th anniversary of the Stonewall riots. Since then the company has been working with a number of institutions on the initiative.

“We wanted to ensure that the customer service supported this as well, that it wasn’t just listing a name on the card, but that every channel addressed the customer appropriately,” Guerin said.

BMO Harris Bank will begin providing True Name cards next month. Ernie Johannson, BMO’s group head for North American personal and U.S. business banking, said the bank was motivated by a will to eradicate discrimination.

“We are bringing True Name to BMO to embrace our cardholders’ true identities and empower them to make real financial progress without fear of discrimination,” he said.

Michael Hudson: Debt cancellation is inevitable (and sensible)

In a recent article, economist Michael Hudson (author of many books including, recently, … and Forgive Them Their Debts, J is For Junk Economics, and Killing the Host) predicts widespread cancellation of what he terms “bad debts” as an inevitable solution to the (ignored but apparent) economic woes plaguing the United States.

“When debts can’t be paid and debtors default, what happens to these creditors?” Hudson asks. For an example he cites Washington’s bailout of Wall Street in 2008 following the Great Recession precipitated by the collapse of the housing bubble which was created by reckless and predatory loaning practices on the part of major US financial institutions and credit agencies. In order to finance this bailout, the Obama administration simply created more money while zeroing out interest rates.

“But this artificial life support to keep the debt overhead afloat is nearing the reality of the debt wall,” Hudson writes. “The European Central Bank has almost run out of available euro-bonds to buy. The new fallback position to keep the increasingly zombified U.S. and Eurozone financial markets afloat is to experiment with negative interest rates.”

The destructive consequences of mounting and unpayable debts were understood 5,000 years ago. And these civilizations also recognized the need to cancel said debts, lest their empires collapse as Rome’s eventually did:

“To prevent this rising indebtedness from tearing their realms apart, rulers started their first full year on the throne by clearing away the overhang of arrears that had been accruing on personal and agrarian debts. The aim was to restore an idealized ‘mother condition’ in which bondservants were liberated, able to start with a Clean Slate with their self-support land returned to them, in balance with regard to their income and outgo.”

Hudson draws a parallel to post-WWII America, a period of enormous prosperity when Americans were more or less debt free and able to start families and buy homes. Also to post-war Germany, where debts were wiped out (“easy because most debts were owed to Nazis”).

In contrast, the contemporary situation in America is one in which young people graduate from college weighed down by mountains of debt that prevents them from purchasing homes and contributing to the economy. The US’ solution thus far has been to lower interest rates which further increases debt and, by extension, default. The problem isn’t going away, Hudson writes, thanks largely to collective denial on the part of economic institutions and mainstream analysts.

What the US currently offers—quantitative easing and bailouts—is a stop-gap that will only compound the issues it seeks to address. “Debt cancellation is historically the solution,” according to Hudson, who wonders whether a “revamped economics curriculum will include the study of history to see how earlier societies have coped with the inherent tendency of debts to increase faster than the ability to be paid.” After all, “Western civilization has failed to solve the financial problem that Near Eastern societies were able to cope with by intervening from ‘outside’ the economy.”

Visa won’t stop servicing gun sales: CEO

Visa’s chief executive stated that the payment company will continue facilitating firearms purchases as long as it remains legal to do so.

“We are guided by the federal laws in a country, and our job is to create and to facilitate fair and secure commerce,” Visa Chairman and CEO Alfred Kelly said, according to CNBC.

Kelly’s comments come in the wake of two deadly mass shootings that occurred within 13 hours of each other. On August 3, 22 people were killed when a 21-year-old man opened fire with an AK-47 inside a Walmart in El Paso, Texas. Less than a day later, in Dayton, Ohio, a 24-year-old man shot and killed nine people outside a popular bar; police officers patrolling the area shot and killed the gunman less than a minute after the attack began.

The massacres led to further calls for increased gun regulation including comprehensive background checks.

Kelly’s confirmation that Visa will not cease servicing gun sales stands in contrast to other popular payment methods like PayPal and Square, neither of which hosts firearms transactions.

He stated that it is up to lawmakers, not private companies, to change the rules surrounding gun purchases.

“The reality is that it’s very hard for us to do it,” Kelly explained. “If we start to get in the mode of being legislators it’s a very slippery slope. We shouldn’t be determining what’s right or wrong in terms of people’s purchases.”

Stating that Visa will “follow the laws of the land,” he went on to compare guns with “soda” and “reproductive drugs.”

But Kelly had harsh words for lawmakers who, in his view, aren’t doing enough to address the increasingly pressing issue of gun violence in the United States.

“They ought to get busy on some common sense changes to deal with the horrific problems that we’ve seen in the United States, not just this weekend but for years and years,” he said. “It’s time to start looking at mental health, the size of these magazines, the type of weapons. They’ve got to do something.”

Mastercard has taken a similar line on this, also confirming recently that it is not the company’s job to dictate what people can and cannot buy.

Prepaid cards vs. debit cards

A prepaid card is very different from a bank account debit card. A bank account debit card is linked to your checking account. A prepaid card is not linked to a checking account. Instead, you are spending money you loaded onto the prepaid card in advance.

In most cases, you can’t spend more money than you have already loaded onto your prepaid card. Overspending can occur with a checking account for some types of uses, and with a bank account debit card if you have “opted in” to your bank’s overdraft program. This means that your bank may charge you a fee for covering the cost of a purchase or ATM withdrawal that exceeds what you have in your account. Your bank will also require you to repay the overdraft.

In addition, right now prepaid cards may have fewer consumer protections than debit cards, such as those that apply if the card is lost, stolen, or other unauthorized charges appear. The CFPB has issued a rule requiring all prepaid cards to offer these protections.

Prepaid cards vs. credit cards

Prepaid cards are very different from credit cards. This can be confusing because both types of cards may have a card network logo like Visa, MasterCard, American Express, or Discover on them. When you use a credit card, you are borrowing money. Generally, when you use a prepaid card, you are spending money you loaded onto the card in advance.

How prepaid travel cards work

Prepaid travel cards have gained in popularity in the United States only in the past five to 10 years, though they’ve been widely used in Europe for much longer, says Brad Fauss, President and CEO of the Network Branded Prepaid Card Association (NBPCA), a prepaid card industry association.

A prepaid travel card works in a similar way to a general purpose prepaid card, except that it typically offers special features and perks designed for travel, which can vary based on the issuing bank, Fauss says.

If you have a prepaid travel card with a Visa or MasterCard logo, you’re protected by the zero liability policy from those card networks. Depending on the card issuer, you may be able to use a smartphone app or log onto a website to check the balance, review your purchases and look for charges you don’t recognize.

Getting the most out of your prepaid card

There are some prepaid cards that offer credit-building services, which will improve your credit score.

These cards charge a monthly fee that, after a certain period of time, will appear as a completed loan on your credit report, making lenders more likely to approve you for traditional forms of credit in the future.

However, it’s worth assessing whether the advantages of possessing one of these cards are worth the fees associated with them.