Simpler Fed Clearing for Multistate Banks
WASHINGTON-All of an institution's check-clearing transactions would be accounted for at a single Federal Reserve Bank under a proposal issued Thursday.
Under the plan, which would amend Regulation J, banks with branches in several Fed districts would be able to send checks to any reserve bank for collection. However, all transactions would be accounted for at the reserve bank in the district where the institution is chartered or headquartered.
Currently, branches located in other districts must create complicated check-clearing agreements in which one Fed bank acts as another's agent.
The Fed proposed the changes in anticipation of full interstate branching, which begins June 1. The central bank has already decided that on Jan. 1 it will provide a single Fed funds account to each institution, rather than separate accounts for branches in various districts.
"A single account will ... make account management more efficient for banks with interstate branches," the Fed said.
Comments on the plan are due July 21. IRS: Texas Fed Surplus Wasn't Laundering
WASHINGTON-Cash surpluses building up at a Federal Reserve branch in Texas are not the result of money laundering activity, U.S. government officials told Congress Thursday.
The San Antonio branch of the Federal Reserve bank of Dallas reported a cash surplus of almost $3 billion in 1995, prompting Rep. Henry Gonzalez, D-Tex., to charge it could be the result of money laundering by Mexican drug dealers.
A study by the Internal Revenue Service's criminal investigation division turned up no evidence linking the surplus to money laundering. The surplus in San Antonio was mostly the result of currency transfers between U.S. border banks and Mexican banks, the IRS study found. Leach Cool to Plan to Limit Tax Writeoffs
WASHINGTON-House Banking Committee Chairman Jim Leach on Wednesday said he is worried that a Clinton administration plan to limit tax writeoffs for operating losses will reduce bank capital.
Rep. Leach also said he wants Federal Deposit Insurance Corp. Chairman Ricki Helfer to weigh in on the plan.
The proposal, heavily criticized by industry executives, is a revenue- raising measure included in the White House's 1998 budget.
Current law allows any company to offset taxes paid in the previous three years. For banks, any unused portion of the offset may be included in regulatory capital as a "deferred tax asset."
The White House has proposed cutting to just one year the period for which a company can receive a refund on previously paid taxes.
"I am concerned that the loss of the two carryback years could cause an immediate reduction in the Tier 1 capital of some FDIC-insured banks and savings institutions," he said in a letter to Ms. Helfer.
--Olaf de Senerpont Domis, Bill McConnell, and wire reports
