ECHO Press Releases

FOR IMMEDIATE RELEASE
April 11, 2001

ECHO DECIDES TO WITHDRAW BANK APPLICATION

Agoura Hills, Calif.-- Electronic Clearing House, Inc. (NASDAQ:ECHO) announced its decision to withdraw its bank application with the Office of the Controller of the Currency ("OCC") and the Federal Deposit Insurance Corporation ("FDIC") at this time and reserve the possibility of re-filing the application when market conditions change. ECHO had filed the application in December of 1999 to charter a national bank to provide merchants with electronic payment services. The decision to withdraw the application at this time was made for several reasons:

• Given today’s uncertain market conditions and the Company’s current stock value, the Company felt finalizing the application, which would initiate bank funding deadlines, would be difficult to accomplish .

• Several other banking options have been presented to the Company since filing the application that may provide similar benefits and deserve further evaluation.

• Although not structured as an “Internet bank” in the sense of using the Internet to attract and grow the bank's deposit base, the Internet was intended to be the primary method of communication between the Company’s merchants and the bank. The Company feels this distinction between its use of the Internet and not being an “Internet-based bank” needs to be clearly defined in its application when and if re-filed.

•  Internet-based banks have received generally poor reviews in recent press and the Company felt, without a significant differentiation of its application, the OCC could confuse the Company’s approach with Internet bank applications.

• An Illinois bank, unrelated to the Company, was closed by bank regulators in December, 2000, due primarily to losses sustained from merchant fraud activity.  The Company believes this may have been a factor to the delays being seen with the OCC. The Company intends to study the facts surrounding the closure of the bank to be sure it has identified in its application just how the Company’s historical approach to merchant processing minimizes such possible activity with its proposed bank.

 “We decided to withdraw our application so we could look at all the factors that were attributable to the delay with the OCC approval”, stated Joel M. Barry, CEO of ECHO.  “We also see real value in two areas, evaluating other options that have been proposed to us since filing our application in 1999 and waiting until better market conditions exist. Withdrawing the application at this time gives us the opportunity to achieve these two goals.” 

Electronic Clearing House, Inc. provides debit and credit card processing, check guarantee, check verification, check conversion, and inventory tracking to over 58,000 retail merchants and U-Haul dealers across the nation. 

To take advantage of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, you are hereby cautioned that this release contains forward-looking statements that are based upon current expectations and involve a number of risks and uncertainties.  Actual operations and results may differ materially from those expressed in the forward-looking statements made by the Company.

Media Contact:
Donna Rehman, Corporate Secretary
(818) 706-8999, ext. 3033 or corp@echo-inc.com

Press Releases are also available by calling (800) 233-0406 ext. 3033, or by email to corp@echo-inc.com

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Electronic Clearing House, Inc. (ECHO)
28001 Dorothy Drive
Agoura Hills, CA 91301

Phone: (800) 233-0406
Fax: (818) 991-5973
E-Mail: echo@echo-inc.com
URL: http://www.echo-inc.com