WASHINGTON Big Banks Pushing For Zero Premium
Dissatisfied with a scheduled 83% cut in deposit insurance rates, the nation's largest banks are pressuring the government to scrap the premium altogether for the second half.
April 28
19140
The revised Community Reinvestment Act rules that regulators recently approved represent a fundamental shift in the way the law is enforced. The focus on paperwork and process is gone. Instead, examiners will apply a three-pronged test that measures a bank's compliance on lending, service, and investment.
April 27
19056
Rep. Richard Baker plans to offer legislation that directly challenges House Banking Committee Chairman Jim Leach's opposition to mingling banking and commerce. Rep. Baker's amendment would allow a firm to become a bank holding company if 60% of its business is derived from financial services; up to 40% of the company's business could come from other areas, like computer software.
April 27
19076
Deposits could flood into banks under a Senate bill that would shelter savings from federal taxes. The Unlimited Savings Allowance Tax Act, introduced by Sen. Pete V. Domenici, R-N.M., and Sen. Sam Nunn, D-Ga., would exempt from federal income tax net increases in bank accounts, among other investments.
April 26
19026 REGIONAL BANKING Most of the Biggest Grew in 1st Quarter
Assets at most of the top 25 bank holding companies grew sharply in the first quarter, according to an American Banker survey. The rise reflected loan growth and adjustments in the market value of on-balance-sheet foreign exchange and interest rate-related contracts.
April 26
19034
Bank of New York Co. said that it has agreed to acquire the securities processing business of BankAmerica Corp., a transaction that will make Bank of New York No. 1 in securities custody in the United States, observers said. Analysts estimated the purchase price - which the banks refused to disclose - at $100 million to $125 million.
April 27
19071
AmSouth Bancorp. announced a sweeping cost-cutting program that includes the elimination of 44 branches and 1,000 jobs. The cutbacks - amounting to 14% of both the branch network and total employment - are designed to bring down the company's outsized efficiency ratio.
April 25
18962
James F. Montgomery said he will step aside from day-to-day management of Great Western Financial Corp., the nation's second-largest thrift company. Mr. Montgomery, 60, will hand the chief executive's reins to John F. Maher, 51, and concentrate on lobbying. He will remain as chairman.
April 26
19033 COMMUNITY BANKING Nebraska Latecomer Now Ag Bank King
Ten years ago, Union Bank and Trust of Lincoln, Neb., had almost no agricultural loans on its books. Today, the $404 million-asset bank is the biggest agricultural lender in the country among banks with at least 25% of loans in agriculture. "We'll finance any type of agriculture, any size as long as they have the right equity ratios and they have the management," says Roger Johnson, a vice president.
April 25
18722
Colorado is expected to pass a bill that would allow interstate branching in 1997 with only moderate restrictions, a stunning reversal for a state that just weeks ago was nearly the first to opt out. "It's a compromise between the independent banks and the bigger banks in the state," said William Iwata, a spokesman for FirstBank Holding Co. of Colorado. "I believe everyone will support it."
April 25
18960
Bank of Oklahoma, the $3.9 billion bank owned by Tulsa-based BOK Financial Corp., has bought three rural banks in Oklahoma and Arkansas. The acquisitions will launch a community banking division at a company that has always been primarily a commercial lender in the state's biggest cities, Tulsa and Oklahoma City. Analysts see more merger activity on the horizon.
April 26
19015
The nation's state banking supervisors have unanimously approved a plan for supervising banks that operate interstate. The plan, approved by 45 state regulators at the annual meeting of the Conference of State Bank Supervisors, is meant to create a "seamless" system of regulation.
April 27
19061 SMALL BUSINESS Fleet Deal Raising Antitrust Questions
Fleet Financial Group may face antitrust questions about the small- business powerhouse it would create by buying Shawmut National Corp. Data show the two companies hold 18.1% of New England small-business loans, and 23.4% of the regional dollar amount.
April 25
18948
Since rolling out its LowDoc loan plan last summer, the Small Business Administration has been aware it had a hit on its hands. Now it knows just how successful the streamlining - for loans of less than $100,000 - has been. The plan accounted for 55.5% of all loans approved in the six months through March under the administration's 7(a) loan program.
April 25
18944 COMPLIANCE Banker Training Firm Does Brisk Business
Bankers Training and Consulting Co., which offers video and computer- based training guides, boasts a client base of 21,000 bank branches across the country. Bankers have shown a keen interest in videos on fair lending, Truth-in-Lending, and Truth-in-Savings. Now the St. Louis company has developed a workstation for banks that combines a computer, VCR, and CD ROM.
April 27
19049
Though new community reinvestment rules won't require race and gender reporting on small business loans, as proposed earlier, the remaining data collection requirements will still mean a lot of work, bankers said. As of Jan. 1, banks with more than $250 million of assets will have to record the number and amount of small business and farm loans originated, and their location by census tract or block numbering area.
April 27
19057 CREDIT UNIONS Wescorp Chief Fears Limits on Corporates
Richard M. Johnson, president and chief executive of Western Corporate Federal Credit Union, is worried that Washington regulators will slap overly strict limits on all corporate credit unions. "Corporates are a hell of a success story," says Mr. Johnson, whose institution is the largest of 42 corporate credit unions.
April 24
18731
CUNA Mutual's decision to quit offering mutual funds next month doesn't mean the industry has soured on the products, industry officials and analysts said. In fact, a growing number of credit unions are interested in expanding their product line to include mutual funds.
April 24
18707 CREDIT/DEBIT/ATMs Card Bellwethers Prospered in Quarter
The major publicly traded credit card companies have recorded another quarter of significant growth and healthy profit margins, though there was a hint of a turn in the credit cycle. Advanta Corp., First USA Inc., and MBNA Corp. were joined by Signet Banking Corp.'s spinoff, Capital One Financial Corp. Capital One reported the only decline in year-to-year earnings comparisons, which were reported on a pro forma basis.
April 28
19084
Posting its strongest growth in a decade, the American Automobile Association said participation in its Visa and MasterCard programs rose 18% in 1994, bringing total cards issued to 3.8 million. Nine participating banks have opened about three million AAA accounts, about 2.4 million of which are Visa.
April 28
19081
Banc One Corp.'s Triumph card processing software has scored another victory. In an expected move, CSG Card Services, a division of the Credit Union National Association, announced that it purchased a license to use the much publicized software for its card operations.
April 26
18996
Visa International and Visa U.S.A. were once indistinguishable. The men at the top - Edmund P. Jensen at the international company and Carl Pascarella in the U.S. unit - have applied different personalities and styles to what have become clearly differentiated assignments. While the intensely competitive Mr. Pascarella gets into the trenches to fight tactical battles, a more deliberative Mr. Jensen stands above the fray, pondering strategies for the long run. And the system seems to work.
Photos and graphs on p. 12
April 27
19074 INVESTMENT PRODUCTS Fund Firms Critical Of Bank 'Short Lists'
Executives at mutual fund companies are becoming increasingly critical of a practice among banks to trim the number of mutual fund families they offer to consumers. Competition for berths on banks' "short lists" has gotten out of hand, the executives say, possibly at the expense of consumers.
April 27
19068
Higher yields and an influx of money into individual retirement accounts continued to fuel growth in certificates of deposit during the first quarter. The Federal Reserve reported assets in small time deposits grew at an annualized rate of 30% during the period.
April 25
18951
A top Mellon Bank Corp. official is vowing to rebuild a money management unit that has been rocked by a wave of defections. "We have a few holes and we'll plug them," said Christopher "Kip" Condron, a Mellon vice chairman. Twenty employees, including 10 top executives, have quit Mellon's Boston Company Asset Management unit.
April 26
19019
First Union Corp. plans to add 100 brokers to its 200-member staff as part of an ambitious effort to steal business from nonbank brokerages. The Charlotte, N.C., bank will be recruiting brokers with Series 7 licenses, which entitle them to sell individual securities as well as mutual funds and annuities.
April 24
18705 MORTGAGES Servicing Becomes Big Players' Game
The mortgage servicing business is increasingly a game for big players. Leading companies like General Electric Capital Corp. and Norwest Corp. have been gobbling up smaller servicers, attaining sizes that would have been unimaginable a few years ago. Some experts maintain that servicers now need portfolios of at last $25 billion; only about 20 companies currently top that level.
April 28
19143
Top Fannie Mae executives continued to best their Freddie Mac counterparts in total compensation last year, according statements from the companies, but the gap narrowed. Fannie Mae's chairman, James A. Johnson, made 1.7 times as much as Leland C. Brendsel, Freddie Mac's chairman, compared with 2.65 times as much last year.
April 25
America's Community Bankers is raising objections to a Federal Accounting Standards Board amendment that requires lenders to segment their portfolios by risk characteristics and measure any declines in value in each segment. Gains in any segment may not be used to offset losses in other segments and the potential for volatility is upsetting people in the industry.
April 26
19012
Prudential Bank's home equity lending chief abruptly left the company. No replacement has been named for William J. Rodgers, a senior vice president at the Atlanta-based subsidiary of the Prudential Insurance Company of America. Two executives are temporarily filling Mr. Rodgers' post.
April 27
19043 TECHNOLOGY Strong Profits Spur Bank Tech Stocks
Financial technology firms' quarterly earnings were mostly higher, spurring a spirited rally in their shares. Banking software developer Hogan Systems Inc. reported net income of $4.6 million for the period, compared with $2.5 million for year-earlier quarter. Payments processor First Financial Management Corp. said revenues rose 48% to $684 million.
April 24
18728
In a sign of its increasing emphasis on the retail market, Comerica Inc. of Detroit has hired a chief technologist steeped in the electronic delivery of consumer banking services. The executive, John R. Beran, had been president of the subsidiary of Electronic Payment Services Inc. that operates the MAC system, one of the nation's largest automated teller machine and point of sale networks.
April 25
18937
Affiliated Computer Services Inc. announced a restructuring of its outsourcing business lines to focus better on banking and electronic funds transfer services, its fastest-growing market segment. As part of the reorganization, ACS created an outsourcing technology group dedicated to nonbank customers.
April 26
19027
First Union Corp. has launched a new national telephone banking service that assigns customers a personal banker and offers virtually every banking service available at First Union's 1,300 branch offices, mainly in the Southeast. First Union's effort, which assumes that customers will use automated teller machines for cash-related services, pushes alternative delivery channels to do the task for which they were created: routing customers away from branches.
April 27
19048 FINANCE Short Sales of Citi Up Despite Profits
Short interest in Citicorp stock jumped again in the latest New York Stock Exchange tabulation, despite widespread sentiment that the New York bank company is in robust health. During the month ended April 13 - which included the last weeks of a record profit quarter - the number of Citi shares sold short rose 3.8%, to 20.8 million.
April 24
18730
Fleet Financial Group Inc. won the bidding for Shawmut National Corp., but it apparently has yet to convince Wall Street that the deal is good for investors. Fleet was left out of the first-quarter bank stock rally, and its trading multiples are among the lowest of the top 50 banking companies.
April 25
18972
There is a growing call on Wall Street for banks to increase disclosure about consumer loan quality. Under current practices, analysts learn about loan quality problems in the consumer sector only when writeoffs of poor credits are disclosed - four to six months after initial delinquencies, said analyst George M. Salem, of Gerard Klauer Mattison & Co.
Photo of Salem
April 26
19030
Joining a trend of high-profile real estate sales by Japanese banks in big cities across the United States, Sanwa Bank sold Financial Square in New York City for $128 million - or about 36 cents on the dollar of its original loan.
April 27
19073
