Capital Briefs

Riggs' Brazil Tax Credits Ruled Improper

WASHINGTON - The U.S. Tax Court has ruled that Riggs National Bank improperly took tax credits for loans to Brazil in the 1980s.

The case is one of scores of tax disputes arising from a massive increase in lending during the last decade to Brazilian companies encouraged by their government to seek U.S. loans. More than 300 U.S. banks made similar loans and took similar tax credits.

U.S. laws prevent the double taxation of profits from investments made in foreign countries. Riggs had contended Brazil already taxed these deals, thus eliminating the need for the bank to pay U.S. income taxes on the profits.

The Tax Court, which decides federal income tax disputes, disagreed. It ruled on Tuesday that Brazil did not require Riggs to pay taxes on its profits.

A tax lawyer who represents a lender in a similar dispute downplayed the impact of the decision, saying the courts already have ruled against banks on most of the issues Riggs raised.

Fuji Unit Pledges Inner-City Financing

WASHINGTON - Fuji Bank's U.S. subsidiary pledged Tuesday to provide $10 million in low-cost loans to redevelop inner city communities.

The Local Initiative Support Corp. will administer the funds, which will be disbursed to groups in New York, Chicago, Los Angeles, San Francisco, Seattle, Miami, Washington, and Houston.

The financing includes a five-year, $4 million loan at 4% and a $6 million revolving line of credit. Part of the funds will help build 2,000 units of affordable housing.

"We hope our commitment will encourage other corporations and foundations to invest in community development around the country," said Shinji Hirayama, president of the bank's New York-based subsidiary, Fuji Bank & Trust Co..

Fuji Bank is the world's sixth-largest financial institution, with $500 billion in assets. Its U.S. subsidiary, opened in 1974, controls $2.5 billion in assets.

Ex-Banker Fined, Banned from Industry

WASHINGTON - A former Wisconsin banker on Tuesday agreed to pay $80,000 to the Office of the Comptroller of the Currency, which charged him with taking unauthorized advances from his institution.

Warren A. Oskey, former senior vice president and chief executive of First National Bank of Glenwood, Glenwood City, appeared Tuesday before an administrative law judge in Eau Claire, Wis., on charges of illegally siphoning money from the bank.

After the hearing, he agreed to pay $75,000 in restitution and $5,000 in penalties. In addition, he will be permanently banned from the business of banking.

The OCC charged that Mr. Oskey took unauthorized salary advances and bonuses from the institution, and fraudulently concealed these payments from regulators and the bank's board.

In addition, Mr. Oskey allegedly violated a 1992 OCC consent order by leasing a luxury automobile using the bank's money without board permission. The agency said Mr. Oskey continued to use the car after he resigned from First National in April 1994, resulting in a loss to the institution.

Texas to Cut Exam Fees for Some Banks

WASHINGTON - Beginning Jan. 1, the Texas Banking Department will reduce examination fees by 15% for some state-chartered institutions.

Healthy banks with assets between $100 million and $250 million will be examined every 18 months instead of every year, resulting in reduced supervisory costs. The department has already extended the exam cycle and lowered fees for banks with less than $100 million in assets.

- Jaret Seiberg and Olaf de Senerpont Domis

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