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Bank by Cellphone? Fed’s Trends in Mobile Financial Services

Mobile Payments

Sandra F. Braunstein, Director, Division of Consumer and Community Affairs

Before the Committee on Banking, Housing, and Urban Affairs, US Senate, Washington, DC; March 29, 2012

Chairman Johnson, Ranking Member Shelby, and members of the Committee, thank you for inviting me to appear before you today to talk about consumers’ use of mobile financial services.

The evolution of new technologies that enable consumers to conduct financial transactions using mobile devices has the potential to affect their financial lives in important — but as of yet, not fully known — ways. For this reason, the Federal Reserve has been monitoring trends and developments in mobile financial services. By “mobile financial services,” I am really talking about two categories of activities. The first we call “mobile banking,” which is using your mobile device to interact with your financial institution, mostly doing things you could also do through more traditional means, like check your account balance or transfer money between accounts. The second we call “mobile payments,” which we define as making purchases, bill payments, charitable donations, or payments to other persons using your mobile device with the payment applied to your phone bill, charged to your credit card, or withdrawn directly from your bank account.

Beyond banking and payments, mobile devices have the potential to be useful tools in helping consumers track their spending, saving, investing, and borrowing, and in making financial decisions. Such technologies also hold the potential to expand access to mainstream financial services to segments of the population that are currently unbanked or underbanked. That said, the technologies are still new, and important concerns, such as consumers’ expressions of unease about the security of these technologies, must also be addressed for consumers to feel confident adopting these new services.

To further our understanding of consumers’ use of, and opinions about, such services, the Federal Reserve commissioned a survey late last year. Nearly 2,300 respondents completed the survey. This survey is among the first to integrate questions about using mobile devices for shopping and comparing products along with questions about using mobile devices for banking and payments. On March 14, 2012, the Federal Reserve released a report, based on these responses, titled “Consumers and Mobile Financial Services.” My testimony today will draw from this report, which is attached to my written testimony.

Nearly nine out of ten adults in the United States have a mobile phone, and two-fifths of those phones are so-called “smartphones” with Internet connectivity. Among all mobile phone users, one out of five has used their phones to conduct some banking activity in the last 12 months. Those users with more traditional mobile phones, or so-called “feature phones,” access bank information via text messages, while smartphone users access their bank information by downloading their bank’s application or via the bank’s Internet site. Younger consumers, those below age 29, have readily adopted mobile banking, and make up almost 44 percent of all consumers surveyed who use such services. Adoption rates of mobile banking also differ by racial and ethnic background, with Hispanics and non-Hispanic blacks making up a disproportionate share of those who use mobile banking services. The most common transactions performed by users of mobile banking were checking account balances or checking recent transactions. Transferring money between accounts was another common transaction.

March 29, 2012
American Masters: Margaret Mitchell and Harper Lee

Though their successes were nearly 30 years apart, Margaret Mitchell (11/8/1900 – 8/16/1949) and Nelle Harper Lee (born 4/28/1926) share much in common: two Southern white women who each won the Pulitzer Prize for their debut novels — Gone With the Wind (1936) and To Kill a Mockingbird (1960), respectively — two of the bestselling classic books of all time, both adapted into timeless, Oscar-winning films. Both women were ahead of their time, challenging the social order and making a cultural impact with their books that still resonates today.

Margaret Mitchell was no ordinary writer. The one book she published in her lifetime – Gone With the Wind — sold millions of copies at the height of the Great Depression in America and won the Pulitzer Prize in 1937, 75 years ago. With over 30 million copies sold to date, it is one of the world’s best-selling novels. Equally impressive, the film adaptation of Gone With the Wind broke all box office records when it premiered in 1939, and received 10 Academy Awards. Margaret Mitchell: American Rebel premieres nationally Monday, April 2 at 9 p.m. followed by Harper Lee: Hey, Boo at 10 p.m. (check local listings).

Harper Lee: Hey, Boo illuminates the phenomenon behind Lee’s first and only novel, To Kill a Mockingbird, and the 1962 film version, celebrating its 50th anniversary this year. Offering an unprecedented look into Lee’s mysterious life, Emmy®-winning filmmaker Mary McDonagh Murphy (author of Scout, Atticus & Boo: A Celebration of To Kill a Mockingbird) interviews Lee’s friends and family, including her centenarian sister Alice, who share intimate recollections, anecdotes and biographical details for the first time: her rise from small-town Alabama girl to famous author, her tumultuous friendship with Truman Capote, and the origin of her most memorable characters: Atticus Finch, his daughter Scout, her friend Dill, and Boo Radley. The documentary also explores the context and history of the novel’s Deep South setting and the social changes it inspired after publication and through the film starring Gregory Peck. Tom Brokaw, Rosanne Cash, Anna Quindlen, Scott Turow, Oprah Winfrey, and others reflect on the novel’s power, influence, popularity, and the ways it has shaped their lives. Lee gave her last interview in 1964 and receded from the limelight.

Source for Margaret Mitchell Photo: Wikipedia; credit for Harper Lee Photo: Library of Congress, Prints & Photographs Division, NYWT&S Collection

http://www.pbs.org/wnet/americanmasters/category/video/web-exclusives/

March 29, 2012
Marie Antoinette’s Wardrobe (Don’t Just Settle for the Shoes)

Editor’s Note: The unimpressive pair of shoes reputed to have belonged to the doomed Queen, Marie Antoinette, fetched an approximate $57,000 price quite recently. But then, considering their age … However, it did whet our appetite for more of her elaborate taste in court costumes and so we went in search. As usual, Wikipedia did not disappoint. What follows, save for Editor Notes, is a portion of that page:

From the outset, despite how she was portrayed in contemporary libelles, the new queen had very little political influence with her husband. Louis, who had been influenced as a child by anti-Austrian sentiments in the court, blocked many of her candidates, including Choiseul, from taking important positions, aided and abetted by his two most important ministers, Chief Minister Maurepas and Foreign Minister Vergennes. All three were anti-Austrian, and were wary of the potential repercussions of allowing the queen – and, through her, the Austrian empire – to have any say in French policy.

Marie Antoinette, Queen of France, in coronation robes by Jean-Baptiste Gautier Dagoty, 1775.

Archduke Maximilian Francis of Austria visited Marie Antoinette and her husband on 7 February 1775 at the Château de la Muette.

Marie Antoinette’s situation became more precarious when, on 6 August 1775, her sister-in-law, the comtesse d’Artois, gave birth to a son, the duc d’Angoulême (who later became the presumptive heir to the French throne when his father, the comte d’Artois, became King Charles X of France in 1824). There followed a release of a plethora of graphic satirical pamphlets, which mainly centered on the king’s impotence and the queen’s searching for sexual relief elsewhere, with men and women alike. Among her rumored lovers were her close friend, the princesse de Lamballe, and her handsome brother-in-law, the comte d’Artois, with whom the queen had a good rapport.

These personal attacks caused the queen to plunge further into the costly diversions of buying her dresses from Rose Bertin and gambling, simply to enjoy herself. On one famed occasion, she played for three days straight with players from Paris, straight up until her 21st birthday. She also began to attract various male admirers whom she accepted into her inner circles, including the baron de Besenval, the duc de Coigny, and Count Valentin Esterházy.

She was given free rein to renovate the Petit Trianon, a small château on the grounds of Versailles, which was given to her as a gift by Louis XVI on 15 August 1774; she concentrated mainly on horticulture, redesigning in the English mode the garden, which in the previous reign had been an arboretum of introduced species, and adding flowers. Although the Petit Trianon had been built for Louis XV’s mistress, Madame de Pompadour, it became associated with Marie Antoinette’s perceived extravagance. Rumors circulated that she plastered the walls with gold and diamonds.

…the innovativeness of Marie Antoinette’s country retreat would attract her subjects’ fierce disapproval, even as it aimed to bolster her autonomy and enhance her prestige…

Editor’s Note (again!): The painting of Marie (above) was done by an equally attractive woman, Elisabeth Vigée-Lebrun — perhaps not dressed as elaborately, but quite lavishly nonetheless.

But for the full Monty, let’s say, we’d rent or borrow from the library director Sofia Coppola’s (no wardrobe slouch herself) version of Marie Antoinette. Or put your own feet up and read the book, Marie Antoinette, by the celebrated author Lady Antonia Fraser, widow of the equally celebrated author Harold Pinter..

March 28, 2012
Jewel-like Insects, Stunning Minerals, Mysterious Creatures

The new Philadelphia bicentennial exhibition which has opened at the nation’s oldest natural history museum features rare and beautiful treasures from the collections, hands-on scientific exploration activities, and the unique opportunity to discover the innovative research going on at the Academy of Natural Sciences of Drexel University.

The Academy at 200: The Nature of Discovery is the centerpiece of the Academy’s yearlong Bicentennial. Building on the Academy’s extraordinary collections and two centuries of global exploration, The Academy at 200 celebrates the groundbreaking discoveries of the past and present and provides a glimpse into the future of one of the world’s great natural history museums. The exhibit is free with museum admission.

Upon entering the exhibit, visitors will come face-to-face with an 80-foot-long wall displaying a marvelous sampling of the Academy’s 17 million specimens. It will be a feast for the eyes: colorful, mounted jewel-like insects, stunning minerals from the Seybert Collection from 1812, glittering jars of mysterious creatures, mammal skulls from a range of animals, giant shark teeth, and an enormous clam shell.

A fully mounted skeleton of an Irish elk that lived more than 10,000 years ago cuts a majestic presence with its huge rack of antlers. The Irish elk is an extinct relative of the reindeer and was frequently depicted by prehistoric cave painters. It serves as a stark reminder that many animals that are closely related to those alive today are now as extinct as the dinosaurs.

Five “immersive” rooms take visitors on behind-the-scenes journeys with Academy scientists out in the field and into their labs. Visitors young and old can take part in interactive studies, examine scientists’ tools, and learn more about the Academy’s cutting-edge research in biodiversity and the environment. The rooms also link the Academy’s historic accomplishments with current projects. The room settings evoke:

Illustration Credit: Wolf’s Skull ©Rosamond Purcell

March 28, 2012
Why Write? It’s Like Everest — Because It’s There

by Joan L. Cannon

I write because I can’t help it. A better question would be why can’t I help it?

First, I need to find out what I know; second, I need to discover what I don’t know; third, I need to note what I must not forget. I’m an indifferent amateur painter, and the other visual arts are beyond my talents altogether; I can’t perform music. I find I can put words on paper. They can do for me what nothing else can.

Since I have a poor memory and perhaps a little too much emotion, the act of writing helps to suggest the perspective I need to cope with what is happening or what has happened to me, and to suggest how one experience might be useful to others. Utility is not all there is to that. Love for rhythm and cadence and image-making, and the opportunity to cause a chuckle and the frisson of recognition are involved.

Writing is the corollary to reading. All the words that have instructed and inspired and comforted and exhilarated through all the years of a long life prove to me that if I could find the readers, even I could add to that legacy. I can’t resist the temptation to try. I care about how words can conjure and reveal; I respect the fact that if you think (as opposed to dream or imagine) you need words. They matter. Most people want to live a life that matters. After my children, words seem to be my best opportunity to accomplish that, on however small a scale.

That’s not quite the whole story, though. Poetry seems to be a different matter. Perhaps, in part, because the kind of precision required for satisfactory prose could be like a curse on a poem. Self-revelation is often an unintended consequence in prose; in poetry that generates that delightful shock of comprehension that has nothing to do with fact or analysis, the exposure of the poet is likely to be what makes the poem work for its readers. So if you sit down and produce a poem, it’s likely that you’ve exposed some of what lies beneath the skin, even as deep as bone if you get the words right.

Not every writer wants to go there. I’m not even sure I do. However, in a poem, suddenly a layer of understanding becomes visible through the imagery, the formality or lack thereof, the figures of speech that are nonliteral (rather than denotative are connotative, and thus mean no more to the reader than to the writer). One of the thrills is writing often is that I’m amazed when I read over something I’ve committed to paper. It’s a feeling of unmatched achievement. It feels so good to have put out there something that until then seemed inexpressible.

Illustration above: New England Courant. (Published by James and Benjamin Franklin, 1721–1726). Franklin’s own file of the paper is now in the British Library; in it he wrote the authors’ initials beside anonymous articles. His own initials, “B.F.,” here mark the third “Silence Dogood” essay.

March 27, 2012
Frontline, Murdoch’s Scandal: “The Government Was So Scared of Rupert “
Watch Murdoch’s Scandal Preview on PBS. See more from FRONTLINE.

“The government was so scared of Rupert. He could do anything.”

On PBS’ FRONTLINE, Lowell Bergman takes the viewer into the story of how Rupert Murdoch’s media empire and his family’s dynasty have been threatened by shocking allegations of invasion of privacy, obstruction of justice and bribery.

At the center are three men who dared to take on Murdoch — and paid a considerable price. Murdoch’s tabloids have long vanquished those who got in the way. But these men have endured intimidation and been at the forefront of a campaign to bring accountability to Murdoch’s papers. Bergman introduces us to Nick Davies, the reporter who broke the phone-hacking story for rival newspaper The Guardian, Labour MP Tom Watson, who keenly questioned Murdoch at his parliamentary hearing, and Mark Lewis, the lawyer for more than 80 alleged phone-hacking victims.

Murdoch’s empire might have survived their criticism unscathed, as it has in the past, but for the revelation that News of the World, Murdoch’s top-selling tabloid, had hacked the phone of 13-year-old Milly Dowler while the UK media obsessed over her abduction and subsequent murder in 2002. Dowler’s case revealed the nature and the scale of the tabloid hacking that went well beyond celebrities and the royal family.

It’s a fascinating tale that raises important questions not just about the business of media, but the way media can influence, intimidate and co-opt powerful people and institutions.

Andrew Golis, Senior Editor/Director of Digital for Frontline

Editor’s Note: Here are just a fraction of the journalistic guidelines for a Frontline program. Specifically, fairness means that producers:
- will approach stories with an open and skeptical mind and a determination, through extensive research, to acquaint themselves with a wide range of viewpoints;
- will try to keep personal bias and opinion from influencing their pursuit of a story;
- will carefully examine contrary information;
- will exercise care in checking the accuracy and credibility of all information they receive, especially as it may relate to accusations of wrongdoing;
- will give individuals or entities who are the subject of attack the opportunity to respond to those attacks;
- will represent fairly the words and actions of the people portrayed;
- will inform individuals who are the subject of an investigative interview of the general areas of questioning in advance and, if important for accuracy, will give those individuals an opportunity to check their records;
- will try to present the significant facts a viewer would need to understand what he or she is seeing, including appropriate information to frame the program; and,
- will always be prepared to assist in correcting errors.
March 27, 2012
Hearings on the Hill, Examining the Current State of Cosmetics: What’s Missing from Those Labels?

THE COMMITTEE ON ENERGY AND COMMERCE;
INTERNAL MEMORANDUM

March 23, 2012

To: Energy and Commerce Committee Members

From: Majority Staff

Re: Examining the Current State of Cosmetics

____________________________________________________________________

On Tuesday, March 27, 2012, at 10:15 a.m. in 2322 Rayburn House Office Building, the Subcommittee on Health will hold a hearing entitled “Examining the Current State of Cosmetics.” The following provides background on the hearing.

I. Witnesses. Panel I

Michael M. Landa, J.D.
Director
Center for Food Safety and Applied Nutrition (CFSAN)
U.S. Food and Drug Administration (FDA)
Witness Testimony

Panel II
Halyna Breslawec, Ph.D.
Chief Scientist and Executive Vice President for Science
The Personal Care Products Council
Witness Testimony

Peter Barton Hutt, J.D.
Senior Counsel
Covington & Burling, LLP
Witness Testimony

Mr. Curran Dandurand
Co-Founder and Chief Executive Officer
Jack Black Skincare
Witness Testimony

Ms. Debbie May
President and Chief Executive Officer
Wholesale Supplies Plus
Witness Testimony

Michael J. DiBartolomeis, Ph.D, CHI
Chief Occupational Lead
Poisoning Prevention Program & California
Safe Costmetics Program, California Department of Public Health

1Additional witnesses will be added.

Majority Memorandum for the March 27, 2012, Health Subcommittee Hearing

II. Background

The cosmetics industry has been regulated by FDA since the enactment of the Federal Food, Drug and Cosmetic Act of 1938 (FFDCA). Currently, FDA’s CFSAN is responsible for regulating cosmetics. Similar to drugs, devices and food, the FFDCA prohibits the introduction of adulterated or misbranded cosmetics into interstate commerce and provides for seizure, criminal penalties and other enforcement authorities for violations of the FFDCA. In addition, under the authority of the Fair Packaging and Labeling Act (FPLA), FDA requires an ingredient declaration for cosmetics to enable consumers to make informed purchasing decisions. Cosmetics that fail to comply with the FPLA are considered misbranded under the FFDCA.

March 26, 2012
C-Span Has Audio of Supreme Court Hearing: ABA Survey Predicts A 6-3 Split on Patient Protection and Affordable Coverage Act

C-Span is running audio of Monday’s hearing on the Patient Protection and Affordable Coverage Act. Tuesday’s audio. Wednesday Audio (1); Wednesday Audio (2)

The SCOTUS decision is expected to come down in late June, 2012.

“Beginning today, the US Supreme Court holds oral arguments in the multi-state healthcare lawsuit. The Court considers whether the federal Anti-Injunction Act is relevant to the Affordable Care Act and if so, does the Court have jurisdiction? The Anti-Injunction Act prohibits the Courts from striking down tax laws before they take effect.

“The 26 states in the lawsuit before the Supreme Court are: Alabama, Alaska, Arizona, Colorado, Florida, Georgia, Idaho, Indiana, Iowa, Kansas, Louisiana, Maine, Michigan, Mississippi, Nebraska, Nevada, North Dakota, Ohio, Pennsylvania, South Carolina, South Dakota, Texas, Utah, Washington, Wisconsin and Wyoming.”

Audio Released of Health Care Oral Argument

The consensus of more than a dozen US Supreme Court and health-law experts responding to a recent online questionnaire was that the justices will rule 6-3 in favor of upholding the Patient Protection and Affordable Care Act.

The American Bar Association’s Preview of United States Supreme Court Cases magazine, which provides expert analysis of all high court arguments, published the highlights of the responses from lawyers, journalists and academics in a special edition of the magazine “Health Care and the High Court.” The Supreme Court has heard six hours of legal arguments on the constitutionality of the act over three days from March 26-28.

The Preview of United States Supreme Court Cases magazine is available here.

March 26, 2012
Superbugs and A Court Ruling About Antibiotics Resistance and Livestock

From the Natural Resources Defense Council release:

The Food and Drug Administration must act to address the growing human health threats resulting from the overuse of antibiotics in animal feed, according to a federal court ruling issued last night. The decision stems from a lawsuit filed by the Natural Resources Defense Council, Center for Science in the Public Interest (CSPI), Food Animal Concerns Trust (FACT), Public Citizen, and Union of Concerned Scientists (UCS) last year.

“For over 35 years ago, FDA has sat idly on the sidelines largely letting the livestock industry police itself,” said Avinash Kar, NRDC health attorney. “In that time, the overuse of antibiotics in healthy animals has skyrocketed — contributing to the rise of antibiotic-resistant bacteria that endanger human health. Today, we take a long overdue step toward ensuring that we preserve these life-saving medicines for those who need them most — people.

“These drugs are intended to cure disease, not fatten pigs and chickens,” Kar said.

In 1977, FDA concluded that feeding animals low doses of certain antibiotics used in human medicine, namely, penicillin and tetracyclines, could promote antibiotic-resistant bacteria capable of infecting people. Despite this conclusion and laws requiring that the agency move on its findings, FDA failed to take action on penicillin and tetracyclines to protect human health for the last 35 years.

The court decision noted, “In the intervening years, the scientific evidence of the risks to human health from the widespread use of antibiotics in livestock has grown.”

“This health threat has been hiding in the margins for four decades. The rise of superbugs that we see now was predicted by FDA in the 70’s,” said NRDC attorney Jen Sorenson. “Thanks to the Court’s order, drug manufacturers will finally have to do what FDA should have made them do 35 years ago: prove that their drugs are safe for human health, or take them off the market.”

The ruling compels FDA to take action on its own safety findings by withdrawing approval for most non-therapeutic uses of penicillin and tetracyclines in animal feed, unless the industry can prove in public hearings that those drug uses are safe. The ruling also makes clear that future nonbinding guidance from FDA will not excuse the Agency from its obligation to hold hearings on whether to withdraw approval for antibiotics covered by the decision.

According to the Union of Concerned Scientists, approximately 70 percent of all antibiotics used in the United States are given to healthy farm animals at low doses to promote faster growth and compensate for unsanitary living conditions — a practice that has increased over the past 60 years despite evidence that it breeds antibiotic-resistant bacteria dangerous to humans. The antibiotics, mixed into feed or water for pigs, cows, chicken, and turkeys, are used at levels too low to treat disease, leaving surviving bacteria stronger and resistant to medical treatment.

Illustration, Wikipedia: Schematic representation of how antibiotic resistance evolves via natural selection. The top section represents a population of bacteria before exposure to an antibiotic. The middle section shows the population directly after exposure, the phase in which selection took place. The last section shows the distribution of resistance in a new generation of bacteria. The legend indicates the resistance levels of individuals.

March 24, 2012
New Deal Numerology: Ryan Redux

by Deputy Editor Tim Price, New Deal Blog, Roosevelt Institute

This week’s numbers: $5.3 trillion; $2 trillion; 3.75%; $800 billion; $368 billion

$5.3 trillion … is a downscaled number. That’s how much less Rep. Paul Ryan has proposed spending compared to President Obama. But some still claim he’s not conservative enough, because he didn’t do it while wearing a Reagan mask.
$2 trillion … is an undemanding number. That’s how much less revenue Ryan’s plan would raise compared to Obama’s. His mantra: ask not what your country can do for you, and don’t bother asking what you can do for your country, either.
3.75% … is a cramped number. That’s the proportion of GDP Ryan wants to spend on all non-entitlement programs, down from 12.5 percent currently. That way when conservatives drown government in the bathtub, they won’t need to fill it up all the way.
$800 billion … is an unhelpful number. That’s how much Ryan wants to cut from income security programs like food stamps. He’s confronting a harsh reality that liberals have ignored for far too long: poor people are hogging all the money.
$368 billion … is a chilled number. That’s how much Ryan plans to save by cutting government jobs and freezing public sector pay. And once we get rid of all those extraneous government workers, that jobs recovery should really start to kick in.

With permission of the blog, New Deal 2.0

March 23, 2012