© 2010 Deluxe Enterprise Operations, Inc. Proprietary and Confidential DeluxeCard Programs and The Credit CARD Act Impact Presented by: Deluxe Corporation,

© 2010 Deluxe Enterprise Operations, Inc.

Proprietary and Confidential

DeluxeCard Programs and The Credit CARD Act Impact

Presented by: Deluxe Corporation, The Bancorp Bank, and FIS Global

May 20, 2010

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Cindy Mattson

Vice President of Prepaid Implementations

FIS Global

Therese Jerrard

Senior Training Specialist

Paul Landry

Senior Vice President

The Bancorp Bank

Becky Frederick

Regulatory Compliance

Deb Rodgers

Senior Product Manager -DeluxeCard

Your Panel For Today’s Discussion

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Our Trusted Partners

FIS Global (Metavante)

The Bancorp Bank and its affiliate

University National Bank

VISA®

Program Role

Card Processor

Issuing Bank The Network

Primary Responsibilitie

s

• Provides online applications for financial institutions to order cards

• Fulfills in-branch inventory

• Provides customer service for cardholders

• Processes card transactions

• Issues the cards based on applicable regulations

• Facilitates the funding for prepaid card transactions

• Provides setup and customer service for financial institutions

• Allows Deluxe to participate in the association as a Program Manager

• Acts as the network for card acceptance at merchants and retailers

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What We’ll Share With You Today

• What’s at Stake? – Protecting Fee Income for Financial Institutions

• Regulatory Changes– Becky Frederick, Esq. Regulatory Compliance– Paul Landry, Senior Vice President, The Bancorp

Bank– Cindy Mattson, Vice President of Prepaid

Implementations, FIS Global• DeluxeCard Compliance• Prepaid Card Program• Let’s Get Started!

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Credit CARD Act & Regulation Changes Overview

Interview with Becky Frederick, Paul Landryand Cindy Mattson

This presentation is provided for informational purposes only with the understanding that Deluxe Corporation, FIS Global and The Bancorp Bank are not rendering legal advice and that this presentation is not to be used as a substitute for legal counsel.

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Key Dates & Background

Credit CARD Act of 2009

Prepaid Card provisions affect expiration dates and restrict ability to charge certain types of fees.

Signed into law

May 22nd, 2009

Jan. 12th, 2010

Federal Reserve issues final rules for

credit cards

Aug. 22nd, 2010Mar. 23nd, 2010

Federal Reserve issues final rules

for gift cards

Law takes effect

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What Do The New Rules Cover?• Cardholder fees

– Cannot charge inactivity, dormancy or service fee until 12 months of inactivity

– Can only charge one fee per month– Fees must be properly disclosed

• Expiration – cards & funds– Cards must have five years remaining life at time of sale– Funds cannot expire less than five years from time of sale

• Disclosure requirements– New disclosures available to purchaser prior to sale– New disclosures on the card– Fee disclosures available via toll-free number

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All Open Loop General Purpose Prepaid Programs

All Open Loop General Purpose Prepaid Programs

Which Programs Are Affected?

Loyalty, Promo, Award

Loyalty, Promo, AwardGift CardsGift Cards

Reloadable Prepaid

(not marketed as gift)

Reloadable Prepaid

(not marketed as gift)

Included – all provisions

apply

Included – all provisions

apply

Excluded – no provisions

apply

Excluded – no provisions

apply

New disclosure rules apply

New disclosure rules apply

For all gift cards issued on or after August 22nd, 2010

IN SCOPE IN SCOPE OUT OF SCOPE

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Service Fee Changes

• No service fee can be charged unless there has been at least 12 months of no activity on the gift card

– Deluxe currently charges a monthly service fee of $2.50 commencing in 7th month and will implement this change for gift cards issued on or after August 22, 2010

• Cannot charge more than one fee per month

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Expiration Date Rules

• Systemic controls that require a minimum 5-year life meets standard

• Stocking cards on shelf with 5 1/2 years remaining life meets standard

• Safe Harbor rule for cards created with 7-year life (Sec. 205. 20(e)(3)(iii))

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DeluxeCard Fee Compliance

• FIS Inactivity Fee meets compliance requirements– Monthly fee– DeluxeCard has configured the minimum number of

months of inactivity– Activity based on financial transactions, excluding

cardholder fees

• DeluxeCard has reviewed Final Rules carefully to determine what fees can be assessed

• DeluxeCard has reviewed policy for foreign currency transactions

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Expiration Date Changes

• All expiration dates must be at least five years after the date the gift card is issued– DeluxeCard Visa Gift Cards currently expire two years

after the date the gift card is issued

– Gift cards issued on or after August 22, 2010, DeluxeCard Visa Gift Cards will expire seven years after the gift card is issued

• Expiration date must be disclosed on the face of the Gift Card– DeluxeCard Visa Gift Cards currently disclosure the

expiration month and year on the face of the gift card

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DeluxeCard Expiration Date Compliance

• New, longer card expiration dates

– DeluxeCard has configured the number of months for card expiration

– Network rules are being modified to allow the longer required expiration dates

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DeluxeCard Expiration Date Compliance

• Provide consumers with a reasonable opportunity to purchase a card with a minimum of 5 years remaining life– 7 year expiration of DeluxeCard Visa Gift Cards gives

financial institutions 2 years of additional shelf-life– Stocking cards on shelf with 5 ½ years remaining life

(minimum)– Meets Safe Harbor rulePolling question: What promotions are you considering to deplete your existing gift

card stock? a. Moms, Dads and Grads Promotion b. Employee recognition

c. Email capture incentives d. Online banking enrollment incentives e. E Statement enrollment incentives f. All of the above

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Disclosure Changes

• All fees must be disclosed on the back of the gift card– Deluxe has opted for the 7 year expiration date

• Expiration date must be disclosed on the face of the gift card

• These changes require new card stock

• Bancorp needs a record of destruction of existing card stock

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DeluxeCard Disclosure Compliance

• In-Branch– DeluxeCard will design packaging and/or other

materials to address pre-sale disclosure requirements

• On-Card Disclosures– DeluxeCard will include the required

disclosures on new card designs• Telephone Disclosures

– DeluxeCard will continue to provide a toll-free phone number on the card

– FIS CSRs will provide fee information via the CMSe application

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Compliance Support• Financial institutions will take advantage of grandfathering

cards sold prior to August 22nd, 2010

• To create compliant programs, DeluxeCard will modify BIN extension configurations for cardholder fees and expiration dates

• To create compliant cards, DeluxeCard will modify card package

components to incorporate new disclosure requirements on the

cards, on packaging and for new cardholder terms & conditions

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Compliance Resources• www.deluxe.com/dcprogram

– Terms and conditions, card handling instructions, and compliance overview will be posted

– Inventory log matrix will be available for download

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Next Steps

• Deplete existing inventory

• Order new cards (late June)

• Complete form to log obsolete cards

• Provide Bancorp Bank with log of obsolete cards

• Destroy any old cards, carriers & cardholder agreements on August 22nd, 2010

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DeluxeCard® Prepaid Visa® Card Program

The final rule affects only our DeluxeCard® Visa® Gift Card Program and not our DeluxeCard Prepaid Visa Card Program

As long as the reloadable prepaid card is not marketed as a gift card, changes to gift cards are not required for the prepaid card program

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• Financial Institutions that currently pay ATM and one-time debit transactions could realize a 40-60% decrease in NSF fee income due to Reg E

• The DeluxeCard® Prepaid Visa® Card can help FIs generate fee income and reach new customers to meet your target

Grow Revenue and Reach New Customers

Polling question: What has your financial institution considered to generate additional fee income?

a. Expansion of gift card program b. Adding reloadable card program c. Pursuit of opt-ins for Reg E d. Adding identity theft solution

e. Other f. All of the above

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• Increase fee income

• Reach new customers

• Expand financial institution product suite

• Complete turnkey reloadable program

• No annual administration fees

• Free financial institution support

• Free personalized marketing tools

Value to You

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• Budget-friendly

• Easy to manage

• Easy to re-load

• Less risky than cash

• Controlled means to provide funds

Several Reasons Consumers Value Reloadable Cards

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Targeting Customers

• College students • Seniors on a budget• Bridal budget• Potential customers that don’t qualify

for a traditional account

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• Flexible

• Convenient Loading

• Money Management

• Safer

• Easier

• $5,000 Maximum Load

Reloadable Card Features

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• Setup Fee = $600

• Card Fee = $2.60

• Most FIs charge $4.95-$7.95 per card

• FIs can charge $2.95-$4.95 to reload card

• Minimum card order is 50 cards

• One card design

• Card is adhered on UltraForm and comes with Card Holder Agreement in #10 Envelope

Card Details – Financial Institution

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Card Details – Consumer Experience

Customer does not pass CIP screen

Bancorp Bank sends letter to customer to obtain necessary info

Customer purchases instant issue card at financial

institution branch

The Bancorp Bank receives updated information

Customer does not pass CIP screen. Customer keeps

instant issue cardCard expires after two years

Customer Identification Process screen is batched and

sent to The Bancorp Bank

Customer passes CIP screen and personalized card is

created and mailed to the customer

Customer receives personalized card and

activates via IVR or website

Instant Issue card is deactivated

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Card Details – Consumer Card Fees

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• Maximum load value = $5,000

• Maximum spent on a Card per day = $2,500

• Minimum initial value load = $20.00

• Direct Deposit form to fund card from employer or other account

Card Details – Consumer Purchase

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Card Details – Consumer Reloads• Minimum value reload = $1.00

• Maximum value reload = $950 cash reloading OR $5,000 via direct deposit

• Maximum reloads per day = two (2)

• Add value or load Card

– via direct deposit

– retail load networks (Green Dot®, MoneyGram® and Visa ReadyLink®)

– and at bank branch

• Funds may be added to a Card (“value loading”) at any time

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• Financial Institution required to integrate into existing BSA/AML policy

• May require Board of Directors approval

• Compliance Overview and FAQs available

Compliance

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Prepaid Card Gift CardSales Process Allow time to discuss

compliance requirements; may

need board approval

Shorter lead time due to less

compliance complexity

Reloadable Yes No

Cost per card to the FI $2.60 $2.60

Co-branding available Yes Yes

Card Carrier In Envelope Yes

Minimum Order Quantity

50 50

Setup Time 4 Weeks for FIs on Gift Card; 6-8 Weeks

for new FIs

6-8 Weeks

Web based Platform CMSe CMSe

User ID and Password Same as Gift Card Same as Prepaid

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Training and Marketing Materials

Same web portal as gift cards:www.deluxe.com/dcprogram• Training Modules• Marketing Materials

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Program Implementation of 6-8 Weeks

• Execution of Letter of Participation (LOP)• Completion of paperwork in FI Executive Kit

– Set-up form, Visa application, Agent Marketing and Distribution Agreement, Visa Member Applicant Risk Review Survey, Self audit checklist, Send in logo for co-branding

• Enter into Implementation Wave and Receive Card Management Access (CMSe)

• Training of Tellers• Order Marketing Materials• Access to Reporting Portal

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2. How did you hear about this session:a. E-mail inviteb. Postcard invitec. Call from Deluxed. Associatione. Forwarded to me by

colleaguef. Other

3. Are you interested in learning more about the DeluxeCard Prepaid Visa Card Program?a. Yesb. Not at this time

1. On a scale of 1-5, how prepared are you for the Credit CARD Act and final rule changes to your customers?a. 4 – Very Preparedb. 3 – Almost therec. 2 – Somewhatd. 1 – Not Very

Exit Poll

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Additional Resources• DeluxeCard Visa Gift Card Program Compliance Overview• DeluxeCard Visa Gift Card Program Compliance FAQs• DeluxeCard Prepaid Visa Card Program Compliance

Overview • DeluxeCard Prepaid Visa Card Program Compliance FAQs• Visit www.mydeluxecard.com• Submit outstanding questions

– will respond electronically

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Thank You for joining the web seminar. We look forward to working with you on this and other marketing initiatives.

A recorded copy of this web seminar will be posted on www.deluxe.com/deluxecard in one week.

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Documents

© 2010 Deluxe Enterprise Operations, Inc. Proprietary and Confidential DeluxeCard Programs and The Credit CARD Act Impact Presented by: Deluxe Corporation,