TUSCALOOSA, Ala. - (09/15/04) -- State Supreme Court Judge Jean Brownrefused to recuse herself from a $1 million defamation case againstFirst Security CU, even though bankers supporting the credit unionside contributed more than $56,000 to her reelection campaign. "TheCanons of Judicial Ethics do not require my recusal; case law doesnot support it; and my conscious will now allow it," said Brownlast Friday, after the court refused to rehear the case based on anethics complaint brought against her. Last May the state's highcourt overturned a lower court's $1 million verdict against thecredit union in which a former manager claimed she was wronglydismissed for blowing the whistle on a multi-million dollarcheck-kiting scheme involving a local car dealer. But afterlearning of campaign donations from the Alabama BankersAssociation, which argued on behalf of the credit union side, theformer manager, Karen Brackin, asked the court to rehear the case.She claimed the bankers' campaign contributions created animpropriety, if not an appearance of impropriety by thejudge.
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The Cleveland-based bank is projecting steady growth in net interest income even as credit losses remain manageable. But Chairman and CEO Chris Gorman also said that he thinks a recession is likely.
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The first-quarter increase involved commercial real estate loans, including some problematic multifamily loans and an office credit, but none of the criticized loans were to consumers, officials at the Dallas company say. Further CRE deterioration is anticipated.
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The Detroit-based company is exploring ways to make more consumer auto loans without running afoul of stricter capital standards that are expected from the Federal Reserve. Possible approaches include more securitizations and the use of credit risk transfers.
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The House Financial Services Committee also sent to the full House two bipartisan bills, including one that would prevent large banks from opting out of having to recognize Accumulated Other Comprehensive Income in regulatory capital.
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Charge-offs and nonperforming loans rose at the Georgia bank in the first quarter. But it blamed the problem on one large client and said the matter has been resolved.
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Amid healthy first-quarter loan growth and improving credit quality, Discover Financial Services slashed its profits by $800 million to offset remediation costs from a 16-year period when it overcharged certain merchants.
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