WASHINGTON FDIC Puts Off a Vote On Insurance Premium
The vote to reduce the banking industry's deposit insurance premium is being delayed by the Federal Deposit Insurance Corp. When the 83% cut was proposed in January, FDIC officials said they would vote on it in mid-May. However, the issue has not been slated for consideration.
House Banking Committee Chairman Jim Leach told the Independent Insurance Agents of America to take their complaints about bank insurance powers to the Comptroller of the Currency. In a letter, Rep. Leach said he agrees with the agents that the national bank regulator has overstepped its legislative mandate.
The administration ran into sharp criticism from its own party over a plan to overhaul the Federal Home Loan Bank System. Rep. Paul E. Kanjorski, D-Pa., said one element of the administration's plan - a formula for allocating interest payments on Resolution Funding Corp. bonds - was "Robin Hood in reverse."
Federal Reserve Chairman Alan Greenspan flatly opposed legislation transferring to the central bank responsibility for the Real Estate Settlement Procedures Act. Parts of the law are in essence price controls, he said. "This is foreign to the board's central bank responsibilities," he said.
The Comptroller's office is quietly trying to reverse the conventional wisdom about bank securities underwriting. The agency is circulating a report that asserts underwriting done directly by a bank subsidiary is no more risky than underwriting accomplished through a unit of a bank holding company. But the Comptroller faces long odds.
18626 REGIONAL BANKING GreenPoint to Pay $660M For 12 Ahmanson Offices
GreenPoint Financial Corp. said it will pay H.F. Ahmanson & Co. $660 million for the New York City-area deposits of Home Savings of America. The price, amounting to a hefty 8% premium on the $8.3 billion of deposits involved, surprised many observers. The New York thrift also will be getting up to $1.5 billion of securities.
Twelve banks, including several major retail institutions on the West Coast, are planning to offer home banking services in October with the popular Quicken personal finance software. The group includes U.S. Bancorp of Portland, Ore., First Chicago Corp., and San Francisco-based Sanwa Bank California and Union Bank.
Keycorp chairman and chief executive Victor Riley said he would turn over the CEO's title to president Robert Gillespie on Sept. 1 - four months ahead of schedule. Analysts said the move would quiet investor concerns about who was really running the company.
Norwest Corp. has agreed to acquire the Foothill Group Inc. for $441 million in stock. That price is 12 times Foothill's estimated 1995 earnings, and the deal brings Minneapolis-based Norwest one of the nation's largest publicly owned commercial finance companies.
18599 COMMUNITY BANKING Small Banks Swear Off The Use of Derivatives Derivatives - viewed by some as a destroyer of financial institutions and careers - will disappear from many community banks' balance sheets next year, according to a survey. Though 84% of the more than 800 community banks surveyed invest in the financial instruments, only 58% expect to invest in them in the future.
John Kanas is a shareholder's dream, and his competition's worst nightmare. For years, the president of North Fork Bancorp. has been making waves in eastern Long Island's otherwise staid banking community.
A former director of a Connecticut bank blasted executives and the board for rejecting a buyout offer from Fleet Financial Group. At Glastonbury Bank and Trust Co.'s annual meeting, former director Henry J. Stone Jr. accused directors of not serving shareholders' interests in deciding to remain independent.
Essex Bancorp, a Virginia thrift holding company struggling to survive, said it suffered a $1.6 million loss in the first quarter. Essex said that if it does not raise $15 million by the end of the second quarter, it could fall into receivership or be subject to other enforcement actions.
18660 SMALL BUSINESS EAB Finding Big Profits In Lease Unit's Small Deals
It's hard for most bankers to admit they are sending salespeople out looking for $45,000 deals to finance. But Ira Romoff, senior vice president and head of small business banking for European American Bank, is not only looking for these deals, he's making money on them.
The quickening pace of change for lenders participating in the Small Business Administration's loan guarantee programs is beginning to get on some people's nerves. In its most recent shift, the agency announced it would stop guaranteeing debt refinancings after May 12. The move - expected to affect about 3,000 loans and cut loan volume by $500 million this year - will allow the agency to guarantee new loans throughout its fiscal year, ending Sept. 30.
18512 COMPLIANCE Conflicting Rules Make Banks Do Balancing Act
The government has created regulatory paradoxes by layering new, often contradictory requirements on top of top of existing rules. compliance experts say. For example, the Equal Credit Opportunity Act clashes with requirements to prevent money laundering.
Now that Community Reinvestment Act rules are out, compliance consultants are scrambling to help bank clients adjust to the new requirements. Although consultants may differ on specific CRA strategies, all agree that the time to start planning is now.
The Treasury Department has just finished a yearlong revamping of the report banks must file on transactions exceeding $10,000. To allow time for training employees, banks have until Oct. 1 to begin using the new form. The new currency transaction report is 30% smaller, said Stanley E. Morris, director of the department's Financial Crimes Enforcement Network.
18613 CREDIT UNIONS NCUA Plan for Corporates Seen as Double Whammy
The National Credit Union Administration's plan to rein in the industry's liquidity centers could kill some institutions and wound others, industry leaders said. As written, the proposal would require corporate credit unions to boost capital while restricting their investment powers. That double whammy could render larger corporates uncompetitive and force smaller corporates to seek merger partners.
Credit union lobbyists are blasting bank proposals to use the industry's money to help bail out the thrift insurance fund. The industry is arguing that its insurance fund has never needed a taxpayer bailout, so it shouldn't have to help beef up the Savings Association Insurance Fund.
When Robert Bream took over United Air Lines Employees' Credit Union in 1991, it was strictly a deposit-and-loan shop. He has added products, but does not expect to see mutual funds anytime soon.
18208 CREDIT/DEBIT/ATMs National City to Test A Procurement Card National City Corp. said it will use its merchant processing power to initiate a purchasing card program. The Cleveland-based holding company will test the Visa-brand card this year and launch it in 1996.
Jerry D. Craft, who engineered one of the card industry's great successes at Wachovia, has a new consulting firm and a first major client - PNC. The deal, in which First Data Corp. plays a big role, could signal a new wave of outsourcing.
First Bank System Inc. is extending its commercial card program overseas in a strategic alliance with HSBC Holdings. Midland Bank PLC, HSBC's London subsidiary, will be the first bank to issue cards modeled after First Bank's Visa corporate and purchasing cards.
Mondex, the smart card venture owned by National Westminister Bank of London, has landed in North America. Two of the biggest banks in Canada - Royal Bank of Canada and Canadian Imperial Bank of Commerce - will own the country's Mondex franchise and invite other financial institutions to join.
18228 INVESTMENT PRODUCTS Mellon a Runaway Leader In Fund Sales by Banks
Mellon Bank Corp. was the largest bank seller of mutual funds last year - towering above second-place Chemical Banking Corp. - according to federal data. Thanks in large part to its ownership of the Dreyfus fund family, Pittsburgh-based Mellon reported $91.3 billion in mutual funds sales. As is the case with most banking companies, the bulk of those sales came from money market funds.
The race to acquire Wells Fargo Nikko Investment Advisors is heating up. Merrill Lynch & Co. and Barclays de Zoete Wedd Investment Management are in discussions with the $170 billion-asset money management firm, according to sources. The companies join State Street Boston Corp. as the leading contenders to take over Wells Fargo Nikko, a joint venture of Wells Fargo & Co. and Nikko Securities.
Many bank mutual fund executives got their first taste of a major downturn that saw money flowing out of portfolios. So the Investment Company Institute's annual bash in Washington functioned as a support group - hearing from fund company executives who have gone through many a down cycle.
First Union Corp. officials said its Evergreen Asset Management subsidiary will administer the combined Evergreen Funds and First Union Funds after July 1. The two fund families will go by the name Evergreen Funds after that date.
18544 MORTGAGES Top 300 Thrifts Built Assets As Rest of Industry Slipped
Reversing a long decline, the nation's top 300 thrifts increased their assets by about 2% last year. The institutions were helped by rising demand for adjustable mortgages, long their speciality.
The government's attack on loan bias is increasingly focusing on loan pricing. Well-placed sources say the Justice Department is investigating several mortgage operations for possibly encouraging loan officers and brokers to charge above-market interest rates to minorities.
Top Fannie Mae officials have stepped up their drive to reassure lenders that new loan-processing technology will not cut mortgage banks out of the system. Executives of the Federal National Mortgage Association tried to drive home one point: Their agency's new technology is being developed to help lenders, not hurt them.
Mortgage bankers cheered when the bond market rallied, bringing interest rates to the lowest level in a year. But lenders are noticing expressions of interest in home mortgages rather than an actual increase in applications. Interest rates for a 30-year fixed-rate loan dropped below 8% for the first time in a year, according to a Freddie Mac survey.
18524 TECHNOLOGY Chemical Taps Unisys To Manage Its 30,000 PCs
Chemical Banking Corp. has hired Unisys Corp. to manage and maintain all its PC-based systems. Under a three-year, multimillion-dollar agreement, the Blue Bell, Pa.-based vendor will furnish technical support for roughly 30,000 desktop units worldwide. Financial terms were not disclosed.
First Union Corp. has announced a line of cash management services using financial electronic data interchange. The North Carolina regional is the latest of a growing number of cash management banks to offer EDI services to corporate customers as a way to help them streamline their accounts payable and receivable operations.
The Federal Reserve System is embarking on the most sweeping back-office consolidation in its 82-year history. "We're looking across the full range of finance services to make them better, quicker, and more efficient," said James H. Oltman, first vice president of the Federal Reserve Bank of New York.
Douglas T. Williams, the Chase Manhattan Corp. executive in charge of the systems and operations infrastructure, views himself as a pragmatist rather than a cyber-visionary. Despite overseeing all of the bank's computer systems and 13,000 operations staffers spread across Chase's worldwide dominion, Mr. Williams said, "I don't consider myself a technologist."
18661 FINANCE 1994 Was a Boom Year For Emerging-Market Debt
Trade in emerging-markets debt continued to skyrocket last year, surging 40% to $2.76 billion, according to the Emerging Markets Traders Association. The trading leaders among commercial banks - Citicorp Securities, J.P. Morgan, Chase Manhattan Bank, and Chemical Bank - contributed to a survey that showed that "emerging markets" is no longer synonymous with Latin America.
The stock of Bankers Trust New York Co. took a beating after Charles S. Sanford unexpectedly announced plans to retire as chairman. Observers voiced concern over who would succeed him.
BankAmerica Corp. came to market with $200 million of floating-rate Euronotes that could be attractive to foreign investors because of the dollar's recent surge in value.
Shares of Barnett Banks Inc. surged to a 52-week high May 16 as Lehman Brothers analyst Michael L. Mayo said directors are likely to approve either a 15% dividend hike or a 5% share buyback program. Reiterating his "buy" rating, Mr. Mayo said Barnett's stock is cheap, considering the value of all of the company's constituent businesses.