WASHINGTON Green Light for Banks To Market Annuities
Handing banks a solid victory in their push for broader powers, the Supreme Court ruled that national banks can sell annuities. The ruling, upholding a decision by the Comptroller of the Currency, is likely to boost banks' already brisk sales of annuities, experts said.
John D. Hawke Jr., the dean of Washington banking lawyers, is in line to be the Treasury Department's next under secretary of domestic finance. If he is nominated and confirmed, banking would gain another key ally in the Clinton administration.
Bank and thrift trade groups, hoping to put up a united front, plan to meet to develop common positions on everything from taxing credit unions to cutting government red tape. The American Bankers Association, however, is resisting pressure to add deposit insurance to the agenda.
Rep. Marge Roukema, the New Jersey Republican who recently took charge of the House Banking subcommittee on financial institutions, said she intended to hold hearings on the planned reform of the Community Reinvestment Act. She urged regulators to slow down on the plan.
18856 REGIONAL BANKING On Securitization, Banks Proceeding with Caution
The asset-backed securities market has come a long way since its inception in 1983, but commercial banks are hesitant players in this increasingly diverse, $88 billion arena.
Mellon Bank Corp.'s profits were off 70% in the fourth quarter, in part because of charges related to repairing the securities lending business at Boston. Co.
Bank of New York bought the corporate trust business of Meridian Trust Co. of California, its fifth such acquisition in a year.
Chemical Banking Corp. and Chase Manhattan Corp. reported dramatic earnings declines because of restructuring and trading loses. Meanwhile, Bank of New York's earnings rose 28% to a record high.
Interest rate hikes hurt profitability at Banc One Corp. and several other midwestern banking companies.
18796 COMMUNITY BANKING Minority Banks Cry Foul Over RTC Loan Pricing
Seven minority banks are claiming that the Resolution Trust Corp. is charging them unreasonably high prices to buy the loans of failed thrifts. The banks, which last year bought deposits from the RTC with the expectation of buying matching loans from the agency, says the RTC's prices are as much as 10 basis points above the market rate.
Colorado's largest banks have backed off their pledge to resign from the state's banking trade association in the wake of a dispute over interstate branching. The banks had threatened to quit unless the Colorado Bankers Association did not reverse its "opt out" position on the federal branching law.
The Missouri Bankers Association held a week of meetings across the state in hopes of averting an internal fight over the interstate branching issue.
A federal judge declined to reinstate the fired president of an Ohio thrift who filed a "whistleblower" suit against the institution, Jefferson Savings Bank.
18790 SMALL BUSINESS Big Banks Doubling As How-To Publishers
In the fight for small business customers, banks are increasingly turning to how-to publications to get the attention of advice-starved entrepreneurs. With a glut of newsletters available, banks like Chemical Banking Corp., Wells Fargo & Co., and Keycorp are using full-color glossy magazines to differentiate themselves.
For the 12th consecutive year, The Money Store originated more loans approved under the U.S. Small Business Administration's 7(a) program than any other lender in the nation. Next were Banco Popular de Puerto Rico and Heller First Capital Corp.
18548 COMPLIANCE Fed Changes Its Mind on Annual Percentage Yield
The Federal Reserve Board, in an extraordinary action, reversed its Jan. 4 decision to recalculate annual percentage yields under Truth-in-Savings. In the face of staunch opposition by banking and consumer groups, the central bank said it will air the new formula as well as a previously proposed alternative for 60 days of public comment.
Bankers looking for good community reinvestment ideas have been tapping into a data base of successful programs implemented by other institutions. In the six months since the American Bankers Association created the information bank of reinvestment projects, about 200 bankers have called.
Banks hit with regulatory enforcement actions are 2#1/2 times as likely as a typical bank to go out of business, according to Veribanc Inc. of Wakefield, Mass.
18833 CREDIT/DEBIT/ATMs Top MasterCard Aide Quits to Take Bank Job
Peter S.P. Dimsey, president of MasterCard's U.S. region since 1991, resigned to become a senior executive vice president at MBNA America Bank. Mr. Dimsey will be senior executive vice president, responsible for strategic planning at MBNA America Bank and a subsidiary in the United Kingdom.
Several business and consumer groups that don't always see eye to eye joined forces in the name of education. Visa provided financial backing to produce and distribute a brochure, "Managing Your Debts: How to Regain Financial Health." Participants in the writing included the Consumer Federation of America, the American Association of Retired Persons, and the U.S. Office of Consumer Affairs.
The credit card industry's hoped-for bonanza from card acceptance by government entities has been slow to materialize. But growth is picking up among motor-vehicle offices and other state and federal agencies, and a rising number of agencies have tested the concept.
With Schlumberger's acquisition of Malco, the largest U.S. maker of plastic cards, all three of the major French smart card vendors - Schlumberger, Bull, and Gemplus - are poised to do battle in the domestic card technology market.
18834 INVESTMENT PRODUCTS Top Firstar Fund Execs Resign After Shake-Up
Three top mutual fund executives have quit Firstar Corp. in the wake of a major reorganization. Among the departed: Geoffrey G. "Rip" Maclay Jr., brokerage chief at the $14.3 billion-asset Milwaukee banking company. He had overseen a 475-person unit.
In last year's rocky markets, bank-managed mutual funds suffered less on average than funds managed by nonbanks, according to analysis by CDA/Wiesenberger. The banks' edge stemmed from their traditionally conservative investment tactics, experts said.
Two former bankers, Richard Braddock and Don Powell, have emerged as the leaders of the new mutual fund giant Van Kampen/American Capital Inc. And true to their background, a key part of their strategy is to sell more mutual funds through the bank channel.
Mellon Bank Corp. has become the first banking company to publicly acknowledge bailing out a trust investment portfolio for losses on Orange County securities.
18564 MORTGAGES Barnett Paying $162M For Big Texas Lender
Barnett Banks agreed to buy BancPlus Financial Corp., a major Texas mortgage bank, for $162 million in cash. The deal marks Barnett's third acquisition of a home loan business in less than a year. It would swell Barnett's mortgage servicing portfolio by about 80%, to $32 billion.
Fannie Mae has fired off a letter to the government claiming that rival Freddie Mac is getting a regulatory free ride in low-income lending. The letter, from Fannie Mae Chairman James Johnson, blasts the government for accepting Freddie's "poorer performance and weaker efforts" at supporting loans to people with low and moderate incomes.
Many of the companies that are high on the list of Ginnie Mae lenders or had big increases in Ginnie Mae volume last year say it's because they have stuck steadfastly to a niche of the mortgage business that other lenders have shunned.
AmSouth Bancorp's decision to sell most of its mortgage banking assets suggests that banks, which have been mainly been buyers of mortgage businesses, are beginning to be sellers as well.
18851 TECHNOLOGY Checkfree Sues Intuit For Patent Infringement
Checkfree Corp., the nation's largest bill-payment processor, brought a patent infringement suit against Intuit Corp., a personal finance software firm. The legal wrangle is the latest maneuver in the battle to control the nascent home banking market.
An aggressive campaign to detect and combat check fraud is paying off for California's Imperial Bancorp. Fraud losses at the $2.6 billion-asset company's lead bank dropped 77% in 1994 after two security measures were put in place.
American Express Bank has signed a 10-year outsourcing agreement with Electronic Data Systems Corp., finalizing a tentative deal that was first announced in June.
SouthTrust Corp. of Birmingham, Ala., plans to join the growing number of financial institutions that have applied image technology to their check operations.
Under David Sheppard, Fleet Financial Group's technology unit, once known mainly for its ability to consolidate acquisitions, is rapidly gaining attention for its role in a bankwide reengineering effort.
18893 FINANCE Yearend Rush Shatters Syndication Record
Loan syndicators rang out 1994 with a robust fourth quarter, bringing volume for the year to a record-shattering $665 billion. Bankers attributed the volume to a wave of acquisitions by investment-grade companies.
Fleet Financial Group stock went into a tailspin after a meeting with New York analysts fueled doubts about the Rhode Island-based bank's ability to increase interest income. Four firms - Brown Brothers Harriman & Co., Merrill Lynch & Co., Hancock Institutional Equities Service, and Keefe, Bruyette & Woods Inc. - cut earnings estimates.
The merger of New York Bancorp and Hamilton Bancorp was approved by the Office of Thrift Supervision but ran into trouble because of Hamilton's low share price.
After years of false starts, bankers say commercial real estate loan securitization is here to stay. The securities are being "extraordinarily well received," said Richard M. Gunthel of Bankers Trust New York Corp.