Executive Briefing

WASHINGTON Fed Study Challenges Claims of Lender Bias

A new Federal Reserve Board study takes aim at the widely held view that banks discriminate against marginally qualified minority loan applicants. The study contends the exact opposite is true - banks are quicker to extend loans to risky minority borrowers than to comparable white applicants. The study, based on analysis of default rates, could change the way regulators and lawmakers look at fair-lending rules.Jan. 25

19223

As the Federal Deposit Insurance Corp. prepared to consider cutting bank premiums, Chairman Ricki Tigert Helfer said the range of rates charged should be widened. "It would seem to make sense for the 8-basis-point spread to widen, probably considerably," Ms. Helfer said in a speech. Currently, the FDIC charges from 23 cents to 31 cents per $100 of domestic deposits.Jan. 26

19284

Rep. Marge Roukema, R-N.J., declared victory in her campaign to get banking regulators to delay final community reinvestment rules until Congress can weigh their impact. She based this on a Jan. 19 letter from the FDIC chairman.Jan. 23

18979

While welcoming the government's plan to ease rules barring a bank from offering discounts to its best customers, the industry is asking for more leeway. In comment letters on the Federal Reserve's anti-tying proposal, the primary complaint is that banks must include every deposit when deciding whether a customer qualifies for a discount.Jan. 26

19274 REGIONAL BANKING Correspondent Deposit Balances Take a Slide

Correspondent banking balances have declined sharply at most U.S. banks, according to the American Banker's latest annual survey of the top 200 banks in the business. Experts say banks are less keen to deposit money at other banks because there are other, more useful ways to put the funds.

Nevertheless, some banking companies - including Chemical and Bank of New York - are expanding their correspondent businesses.Jan. 25

19232

David Wood, head of Norwest Corp.'s consumer finance subsidiary, says its purchase of San Juan-based Island Financial provides a long-sought presence in Puerto Rico and a stepping-stone to Central and South America.Jan. 23

18957

Bucking the conventional wisdom that brick-and-mortar is obsolescent, First Union Corp. is opening six new branches in Nashville.Jan. 26

19271

Union Planters Corp. of Memphis spent 1994 consolidating acquisitions - and taking big hits to earnings. But CEO Benjamin Rawlins Jr. says the franchise-building will yield long-term results.Jan. 27

19234 COMMUNITY BANKING States Seek Exam Power Over Interstate Branches

The Conference of State Bank Supervisors is pushing a proposal that would give examiners the power to conduct inspections of out-of-state banks that operate within their borders. Some banks welcome the measure as a simplification of the examination process for banks operating in multiple states. But others say it will mean more regulatory headaches.Jan. 26

19286

In a bold move to cut costs, United Carolina Bancshares of Whiteville, N.C., has eliminated 16% of its work force and 15 of 144 branches.Jan. 26

19262

Minnesota banks have won a 10-year tax battle with the state. The banks and other companies will receive refunds totaling about $327 million; the U.S. Supreme Court declined to review the top state court's finding that they were illegally taxed on earnings they made on federal obligations.Jan. 25

19209

Riggs National Corp., the largest and oldest independent bank in the nation's capital, recorded its first profitable year of the decade, but some analysts believe it has a ways to go to prove itself.Jan. 24 SMALL BUSINESS Cross-Selling Potential Goes Down the Tubes

Though banks do a good job of snaring small business customers - though either loans or depository accounts - they often fail to cross-sell multiple products, says Gregory J. LaMothe, senior consultant with Dallas- based Action Systems.Jan. 24

Are SBA-backed lenders worth more to would-be acquirers? The answer appears to be yes. An American Banker analysis shows that 1994 acquisitions of banks with a heavy orientation toward Small Business Administration lending have fetched above-market premiums.Jan. 24 COMPLIANCE A Signpost in the Maze Of CRA Regulations

Amid the chaos of CRA reform, bankers still have to defend their compliance with the law. Bankers and consultants explain how they are coping with the confusion. Bottom line: banks should book reinvestment loans. "The measurement of volume is going to be the whole ball game," says Columbus, Ohio-based consultant Jo Ann S. Barefoot.Jan. 26

19249

CRA ratings hit an all-time high in 1994. An overwhelming 94% of the 5,592 banks examined under the Community Reinvestment Act last year received either "outstanding" or "satisfactory" ratings, according to the editors of CRA/HMDA Update, a Bethesda, Md., newsletter.Jan. 26

19250 CREDIT UNIONS Regulator Pronounces Corporates Healthy

Fears at the National Credit Union Administration over corporate credit union investments have quieted. The agency was concerned about the collateralized mortgage obligations held by about six corporates last year. But after working with those institutions, the regulator's concerns have been calmed.Jan. 23

18941

The National Credit Union Administration has set a public hearing for Feb. 14 to gather testimony on whether Patelco Credit Union and First Technology Federal Credit Union should be allowed to merge.Jan. 23

18943

The American Bankers Association and the Independent Bankers Association of America are teaming up to push legislation that would tax credit unions and subject them to the Community Reinvestment Act.n

18940 CREDIT/DEBIT/ATMs MasterCard Hires An Entrepreneur

MasterCard International president H. Eugene Lockhart has reached outside the credit card community to fill a top administrative post. William I Jacobs has been put in a newly created job - executive vice president of global resources - with an extensive portfolio of financial and other staff functions. Mr. Jacobs says his entrepreneurial background will serve him and MasterCard well as they prepare for structural and financial challenges.Jan. 27

19315

American Express Co. promoted Kenneth I. Chenault to vice chairman, which elevates him into chief executive Harvey Golub's inner circle.Jan. 27

19312

USAA Federal Savings Bank, moving ahead with its remote, or "branchless," banking strategy, has joined MasterCard International's home banking program.Jan. 23

18951

Penn Traffic Co. of Syracuse, N.Y., is the latest supermarket chain to launch a cobranded card. The company, which operates 285 supermarkets in the Northeast, teamed with National Westminster Bank to issue its MasterCard.Jan. 24

MBNA and First USA, continuing to set the pace in credit card industry growth, each added well over $5 billion of receivables during 1994.Jan. 24 INVESTMENT PRODUCTS Nonbanks Gobble More Of Rich Folks' Business

Banks are losing ground to nonbanks in the business of serving the rich, according to a study by Payments Systems Inc. The Tampa firm found that banks last year collected only 24% of the money that affluent people spend on financial services, down from 34% in 1993. Revenues were also off sharply.

The drops are worrisome because banks have long viewed the wealthy as one of their greatest hopes for revenue and profit growth.Jan. 25

19219

The National Association of Securities Dealers' plan to regulate bank broker-dealers isn't as restrictive as most bankers seem to think, according to John Pinto, a top official with the group.Jan. 23

18958

John Pinto, the architect of the NASD's proposed rules to govern bank broker-dealers, is interviewed.Jan. 27

19305 Pinto

Money market mutual fund coffers are swelling as interest rates rise, and banks are sharing in the bounty.Jan. 24

19341

Nine leading mutual fund companies saw their combined sales through banks plunge by one-third in 1994.Jan. 27

19341

First Union Corp. has launched an ambitious campaign to sell more of its mutual funds.Jan. 23

18972 MORTGAGES Big Banks Fatten Up Home Loan Portfolios

The nation's biggest banks sharply increased their holdings of mortgage- related assets last year, building their share of the total mortgage market to about 25%, the highest in more than a decade. Stunning growth in home loans offset a sharp decline in holdings of mortgage securities.Jan. 27

19931

Washington, D.C., has renewed efforts to collect local income taxes from Fannie Mae. If the effort is successful, the mortgage giant might have to pay some $300 million to the city. Congressional action would be required.Jan. 24

Fannie Mae widened its lead in market share over rival Freddie Mac in 1994, amid fierce competition for adjustable-rate mortgages.Jan. 26

19265

Mortgage company stocks remain at low levels as the takeover boom ends and market conditions concern investors.Jan. 25

19213 TECHNOLOGY A Small Bank Woos The Internet Crowd

A community bank in Michigan is preparing to offer a computerized bulletin board for local residents and businesses. State Bank of Fenton, noted for its innovative, technology-oriented strategy, plans to establish a "metropolitan area network" that gives local merchants the ability to advertise goods and services over a network of personal computers.Jan. 25

19209

Two big trade groups want changes in rules proposed by the Treasury Department on how the government uses the automated clearing house network. In separate comment letters, the Independent Bankers Association of America and the National Automated Clearing House Association highlighted some ambiguities in the wording of the proposal.Jan. 26

19270

Small banks are finding that imaging technology, though pricey, pays off - because it reduces operating expenses and generates fee income.Jan. 27

19304

Shawmut National Corp. is working hard to make room in its budget for innovative products and services. "We are clearly out of our retrenching mode," said technology chief Alan Buffington.Jan. 27

19317 FINANCE Union Pacific Gets Help In Upping the Ante

Citicorp, NationsBank, and Credit Suisse rallied behind Union Pacific Corp. with a $3.7 billion loan, as the railroad escalated its bidding war against Burlington Northern to acquire Santa Fe Pacific.Jan. 23

18976

Faced with the prospect of regulation in the wake of the Bankers Trust derivatives controversy, securities trade groups are circulating a voluntary code of ethics.Jan. 24 19190

John Mason of Interstate/Johnson Lane argued at an American Banker analysts roundtable that a historic buying opportunity is at hand and NationsBank is a best buy.Jan. 25

19218

Michigan National Corp.'s stock soared amid rumors that top managers were stepping down and that it might be negotiating a sale.Jan. 26

19280

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