Executive Briefing

WASHINGTON D'Amato: Derivatives Legislation Not Needed Presiding over his first hearing as chairman of the Senate Banking Committee, Sen. Alfonse D'Amato expressed concern about bank derivatives activities but reaffirmed his view that legislation is not needed.

Most lawmakers on the panel echoed the New York Republican's views. And banking and market regulators testified that they have all the power they need to supervise the use of derivatives adequately.

18063

Jan. 6 Leach Would Ease Reins On Some Nonbank Banks Rep. Jim Leach, the new chairman of the House Banking Committee, introduced legislation that would eliminate the growth caps on grandfathered nonbank banks.

The Iowa Republican also would also drop the Glass-Steagall barriers that prevent banks and securities firms from owning one another. However, his bill would maintain the Bank Holding Company Act's separation between banking and commerce.

18023

Jan. 5 New Math for Annual Percentage Yield After more than a year of debate, the Federal Reserve voted to change the way banks calculate annual percentage yields.

The new calculation, opposed by the banking industry, will reflect both the effect of compounding as well as the value of receiving interest during the term of an account.

18025

Jan. 5

*The National Association of Securities Dealers and the four bank regulatory agencies agreed to coordinate examination of bank brokerage subsidiaries.

18970

Jan. 4

*A federal appeals court affirmed a federal law permitting national banks to sell insurance within towns of less than 5,000 people.

18967

Jan. 4

REGIONAL BANKING High-Tech Finance Jocks Thrive Amid Downsizing For all the news about downsizing in the banking industry last year, some job categories grew by leaps and bounds. Banks were in hot pursuit of highly skilled financial technicians, investment bankers, marketers, and risk managers, even as they slashed mid-level and back-office jobs.

Banks, flush with profits, found they could afford to compete with Wall Street and manufacturing companies for these specialists, many of whom command six-figure salaries.

But the surge in high-level hirings may taper off in 1995, as rising interest rates put pressure on margins.

18014

Jan. 5

*The days of easy, cheap funds are over for banks, according to two analysts at Atlanta-based Robinson-Humphrey Co. They see growing evidence that rising deposit costs are putting a strain on net interest margins.

18056

Jan. 6

*First Union Corp., continuing an aggressive expansion into Florida, said it plans to buy Coral Gables Fedcorp for $531 million in cash.

18963

Jan. 4

*Midlantic Corp. leaped onto the acquisition scene for the first time in five years, agreeing to buy Pennsylvania's Old York Road Bancorp for $28.3 million.

18923

Jan. 3

COMMUNITY BANKING Branching Issue Splits Colorado Trade Group Five of Colorado's top banks are threatening to resign from the Colorado Bankers Association unless the group switches its position and supports the new federal interstate branching law.

The dispute, observers say, could permanently weaken the trade group. And it may foreshadow similar conflicts around the country as state legislatures take up the law's provisions to "opt in" or "opt out" of interstate branching.

18912

Jan. 3 Again, Braving the Flak On the Retirement CD Pennsylvania's National Bank of the Commonwealth, risking the wrath of the insurance industry, has become the third institution in the nation to offer the "Retirement CD."

The product blends federal deposit insurance with some of the features of annuities. Similar products have been offered by Montana's Blackfeet National Bank and New Mexico's First National Bank of Santa Fe.

18937

Jan. 4

*The first overhaul of the U.S. Department of Agriculture in 130 years will be a boon for banks whose hometowns gain regional service centers - and a bane for those where the agency is closing 1,274 field offices.

18030

Jan. 6

*Carver Federal Savings Bank in New York, the nation's largest black- owned thrift, tapped regulator Thomas L. Clark Jr. as president and chief executive.

18022

Jan. 5

*Preparing for interstate branching legislation, community banks in Washington State are pressing for tighter caps on deposit market share.

18020

Jan. 5

CREDIT UNIONS Rules Being Eased To Spur Lending

The National Credit Union Administration has revised its performance rating system with an eye to encouraging lending and possibly punishing credit unions that aren't making enough loans.

The changes, announced in a letter to all federally insured credit unions, will take effect when the agency starts its new automated examination program in early 1995.

18872

Dec. 30

*Awane Credit Union , a tiny New Hampshire institution, is applying for a mutual savings bank charter to escape regulatory disapproval of its emphasis on home loans.

18871

Dec. 30

*The Credit Union National Association is urging the National Credit Union Administration to relax enforcement of its mark-to-market accounting rule.

18875

Dec. 30

MORTGAGES Adjustables More Than Half of Market More than half of all new home loans now carry adjustable rates, up from less than 20% a year ago, according to the Federal Housing Finance Board.

The dramatic increase, experts say, stems from rising interest rates and a big push by commercial banks into home loans. Banks have shown voracious appetites for adjustable loans.

18069

Jan. 6 Bonuses Are Skimpy, But at Least It's a Job With origination volume slumping, mortgage companies are not paying out the fat yearend bonuses that have been typical in the past. Bonuses that are half of last year's are not uncommon.

But very few members of the rank and file are looking for new jobs as a result. Amid rampant staff cuts, most people are content just to be working.

18067

Jan. 6

*Fleet National Bank slashed its planned purchase price for Plaza Home Mortgage Corp. to about $89 million from $120 million - a sign of rapidly deteriorating market conditions.

18016

Jan. 5

*Two analysts, citing heavy price competition for new mortgages, issued cautious earnings estimates for big thrifts.

18017

Jan. 5

INVESTMENT PRODUCTS Marketers Kick Off '95 With New Offerings Eager to attract and retain bank clients, investment marketing firms are ringing in the new year with broader product lines and innovative services.

A spot check of six leading firms shows insurance products, including annuities, topping the list of new offerings. Asset-allocation services were a close second.

The companies are also scrambling to sign up community banks, which many once viewed as too small to serve profitably. They may have a tough sell ahead of them, though; rising interest rates have sapped many banks' enthusiasm for investment products.

18051

Jan. 6 Card Servicing Giant Sees Future in Funds First Data Corp., the dominant tracker of credit card accounts for banks, has expansion plans in mutual funds that are a key to its future. The company's fast-growing mutual fund servicing unit, the Shareholder Services Group, is the focus of these aspirations.

18933

Jan. 4

*Market realities are replacing euphoria as bank mutual fund sales slump. While Treasuries and money-market funds are selling briskly, they are much less profitable than the mutual funds that were such hot sellers just a year ago.

18914

Jan. 3

*Repeat sales can give a big boost to profits from mutual fund and annuities, but few banks understand how to bring customers back for more, a consultant maintains.

18006

Jan. 5

CREDIT/DEBIT/ATMs

Graphics candidate from Today's News. retail shopping chart with holiday volume story. French Buy a Presence In U.S. Payment Cards In a fresh sign that smart card technology is advancing rapidly after years in limbo, Schlumberger, the French industrial conglomerate, said it has acquired the largest U.S. producer of plastic payment cards.

The purchase price of Malco Inc. was not disclosed. But the company, with $27.5 million of annual revenue and 350 employees, gives its new parent a significant stronghold in the U.S., which is expected to become the world's largest market for smart cards.

18899

Jan. 3 Cobranding a Savior Or Threat to Banks? Cobranding programs have fueled much of the recent growth in credit cards, but some bankers think the industry has made a bad bargain. They fear there will be too many customers and the associated profits will end up "owned" by banks' high-profile marketing partners.

18978

Jan. 5

*MasterCard International is trading in its Manhattan address for a sprawling 47-acre property in suburban Purchase, N.Y.

18956

Jan. 4

*SPS Transaction Services Inc. has agreed take over Tandy Corp.'s consumer credit business, including the private-label card accounts of its 6,600-store Radio Shack retail chain.

18048

Jan. 6

*International travelers helped the Plus and Cirrus ATM networks surpass the billion-transaction mark.

18045

Jan. 6

COMPLIANCE CRA Attracts Banks To a Washington Slum Several sizeable banks are pushing into Anacostia, a troubled section of Washington, D.C., to earn community reinvestment credit in regulators' backyard.

NationsBank Corp. is leading the pack. It is expected to be a major equity investor in two of the largest development projects ever undertaken in Anacostia. Banks see "a lot of money to be made in Anacostia," says a NationsBank official.

Others targeting the area: Crestar Financial Corp., Riggs National Corp., First Union Corp., Chevy Chase Federal Savings Bank, and Industrial Bank of Washington.

18004

Jan. 5 War Against Laundering Shifts to Wire Transfers Recently announced regulations for wire transfers will change the way law enforcers track money laundering, according to Treasury Department officials.

The rules mark "a basic shift of our attention from cash at the teller's window to concentrating on crime hidden in the details of legitimate commerce," said Ronald Noble, undersecretary for enforcement.

18001

Jan. 5

*Competition and compliance with Truth in Savings are fueling credit unions' software purchases, according to a survey by the Credit Union National Association.

18000

Jan. 5

SMALL BUSINESS Keycorp's Strategy: Ask the Customers Keycorp is trying to win more of the small business market with a simple strategy: asking customers what they want.

After the Society Corp. merger, the Cleveland banking company formed a unique small business advisory board of seven. Senior vice president Sandy Maltby says members like the owner of Lou's Car Care provide "a strong dose of reality" about products and services.

18905

Jan. 3

*Gordon Lindsay, head of Bear, Stearns & Co.'s Small Business Administration securities division, talks with the American Banker about the outlook for the SBA loan market.

18907

Jan. 3

TECHNOLOGY Tuning In to the Promise Of Interactive Television Interactive television is winning converts as a medium for home banking, but questions linger about its costs, packaging, and functionality.

Proponents say two-way TV combines the best attributes of two other high-tech alternatives: personal computers and screen telephones. While an important test has crashed and consumer interest remains low, experts see signs that the technology will catch fire.

18898

Jan. 3 For Bank Tech Stocks, A Year to Remember Banking technology firms had a banner year in 1994, with most posting double-digit percentage gains in their stock prices. Analysts say the strong showing was a byproduct of record-breaking bank profits, which triggered a burst of spending for capital investments and reengineering projects.

18931

Jan. 3

*Spurred by Microsoft chairman Bill Gates' remark to Newsweek last summer that banks had become "dinosaurs," bankers are taking a fresh look at delivering services via computer.

18964

Jan. 4

*Many community banks are dissatisfied with the way technology providers enhance and support their core processing products, according to a survey by the Western Independent Bankers.

18027

Jan. 6

*Customer service improvements can provide banks with big payoffs, says a study by Andersen Consulting.

18974

Jan. 5

FINANCE

Some high-profile investors staked out new or increased positions in bank in the final months of 1994, taking advantage of the sector's downturn.

The buying - by the likes of Warren Buffet and philanthropist Walter H. Annenberg - helped steady some share prices.

18927

Jan. 3 Mergers Don't Always Improve Efficiency Contradicting conventional wisdom, a new study finds little correlation between mergers and efficiency in the banking industry.

In fact, banks involved in mergers in the past four years have operated less efficiently by some measures than those that stayed out of the merger boom, according to the study by Standard & Poor's Corp.

18065

Jan. 6

*Chemical Bank is marketing a $500 million loan to help Burlington Northern raise its acquisition bid for Santa Fe Pacific Corp.

18026

Jan. 5

*Higher interest rates this year will create new disappointments for holders of thrift stocks and stymie the consolidation of the industry, says Charlotte Chamberlain, an analyst with Wedbush Morgan Securities.

18949

Jan. 4

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