Citicorp Says Rate Cap Would Hurt '92 Profit
NEW YORK - Citicorp said a proposed cap on credit card interest rates would have a "materially adverse" impact on its card business.
In a filing with the Securities and Exchange Commission, Citicorp cited the measure adopted by the Senate last week to limit card-loan interest to 14%. Analysts said such a move would wipe out Citicorp's 1992 earnings.
The nation's biggest banking company also said in its 10-Q filing that its consumer loan delinquency rate edged up to 4.7% at Sept. 30, from 4.6% at midyear and 3.7% at Sept. 30, 1990. Mortgages led the increase, with 4.6% of such loans 90 days past due, up from 4.3% in June and 3.3% last year.
The SEC filing also said a subsidiary, Citicorp Securities Markets Inc., had overstated customer orders in distributing government-agency securities, a practice that Citicorp said "was longstanding and widespread" in the industry. It expects no material effect on the company's financial condition.
"CMSI has instituted procedures designed to ensure accurate reporting," the filing said.
In October, the Federal Home Loan Mortgage Corp. said it had fined at least 18 of the 25 firms in its debenture sales group for inflating customer orders and falsifying information.