WASHINGTON ABA to Fight if Bill Helps Credit Unions
Regulatory relief legislation is the banking industry's top priority, but the American Bankers Association is threatening to oppose the bill if amendments expanding credit union powers are included.
House Republican leaders have tentatively agreed to amend regulatory relief legislation to bar the Comptroller of the Currency from authorizing new bank insurance powers.
A House panel voted to trim back the Justice Department's ability to prosecute fair-lending cases, pleasing bank lawyers but enraging civil rights activists. The House Banking subcommittee on financial institutions also agreed to make it easier for officers and directors to defend themselves in suits that often arise after a bank fails.
Deputy Treasury Secretary Frank Newman, the banking industry's most valued ally within the Clinton administration, resigned Tuesday to return to the private sector. Treasury Secretary Robert Rubin said President Clinton would nominate Lawrence Summers, under secretary for international affairs, as Mr. Newman's successor.
Despite highly publicized problems with derivatives, banks sharply increased their holdings of the instruments in the first quarter. With interest rate and currency contracts leading the way, the volume of derivatives in bank portfolios rose $2.2 trillion, or 14%, from the previous quarter, said the Office of the Comptroller of the Currency.
18727 REGIONAL BANKING Ex-Chief Hits Deal Over $30M Tax Bite
Stanford Stoddard, former chairman of Michigan National, failed to get shareholders to change their acquisition by National Australia Bank from a cash deal to a stock swap. He faces paying $30 million in capital gains tax on the sale of shares he owns or controls.
Can use "The Players" Mac
NationsBank Corp. will continue to boost its consumer and middle-market banking businesses, and does not intend to become a wholesale, money- center-style institution, said chairman Hugh McColl in an interview. "I'd say that (the money-center image) is a misconception," he commented.
Can use "Long running success story" Mac
Consumer loans held by commercial banks shot up 13%, to $1.057 trillion, as banks expanded portfolios at a faster pace than they had in nearly a decade.
Half the branches and tens of thousands of jobs will disappear from retail banking during the next five to 10 years, according to a report by Deloitte Touche Tohmatsu International. Its study also noted that new entrants into the market in the United States and the United Kingdom, where deregulation is in full swing, have an advantage over existing players.
Firstar Corp. chairman Roger Fitzsimonds has sent a letter to employees outlining an 18-month restructuring that will mean job changes and cuts at the Milwaukee-based bank. He said that Firstar is hiring a consulting firm to lead the effort.
18738 COMMUNITY BANKING Can use "Number of Dairy Farms" Mac Dairy-Farm Squeeze Worries Wis. Banks
The disappearance of small Wisconsin farmers from the highly competitive dairy business is worrying agricultural loan officers in the state.
One Valley Bank of Charleston, W.Va., is trying to stake a claim in the big-bank-dominated securities business by establishing a broker-dealer unit.
Great Country Bank says it is discussing a "written proposal" from one of several "parties" that have contacted the capital-short Connecticut institution.
Banking analyst Michael L. Mayo believes he has found a good way of picking small banks whose shares are worth buying. The secret? Figuring out which ones have cheap stock prices but hefty franchise value.
Can use "Where are the best banks?" Mac
Louisiana is challenging Texas as the state with the most top-performing independent banks. Texas has held that distinction since California fell from grace in 1990. Last year, it had 22 institutions in the top 100, but Louisiana was second, with 15.
18599 SMALL BUSINESS Money Store Fills Women's Firm Pool
Money Store Investment Corp. has established a $150 million loan pool for the fastest-growing sector of the small business market - companies owned by women.
18604 COMPLIANCE ABA Keynoter: 'We Are Involved' Kate Barr began her banking career 13 years ago at a start-up institution, where she had to do anything and everything. It turned out to be great training for her future as a compliance officer; she is a senior vice president at $160 million-asset Riverside Bank in Minneapolis.
In a new staff commentary on Regulation B, the Federal Reserve Board has backed off a plan to specify that banks defending lending decisions adversely affecting minorities or other protected classes under the Equal Credit Opportunity Act must cite a "business necessity."
The Federal Deposit Insurance Corp. plans to pare by at least 25% the time its examiners spend in banks checking compliance with consumer-related rules.
18380 CREDIT UNIONS Top NCUA Examiner Comes into His Own
David Marquis, the National Credit Union Administration's top examiner, has established himself after nine months on the job. He has become a member of Chairman Norman E. D'Amours' kitchen cabinet.
Can use "Can't crack...' Mac
Credit unions may be strong competitors when it comes to auto and unsecured loans, but they're lightweights in real estate. The Credit Union National Association said the industry's real estate portfolio in April 1995 was $61.3 billion, up 2.5% from yearend 1994.
18366 CREDIT/DEBIT/ATMs Processing Giants In $6.7B Merger
First Data Corp. and First Financial Management Corp., perhaps the two most influential forces in electronic transaction processing, announced that they had agreed to merge. First Data agreed to exchange $6.7 billion of its stock in what the organizations structured as a merger of equals.
Gemplus Card International Corp. has joined the Electronic Business Co- op, a consortium of technology companies developing secure transaction systems for computer networks.
First Data Corp. said it had completed its acquisition of Envoy Corp.'s merchant processing and point of sale businesses for $170 million in stock. Envoy will get up to $21 million more if it meets certain performance objectives.
Visa International said it is automating the borderline calls known as referrals in the transaction authorization area. And in its Plus ATM network, Visa said it can now deliver cardholder balance information to machines anywhere in the world.
A merger has absorbed the Shared Networks Executive Association into the Electronic Funds Transfer Association. The combination is likely to give their members more clout in developing electronic banking policies and regulations.
18598 INVESTMENT PRODUCTS Bank, Billionaire: An Unseemly Case
U.S. Trust Corp. has landed in the middle of a messy court fight over the estate of one of the world's richest women. The New York banking company, which prides itself on providing discreet service to the wealthy, has come under fire for its handling of the $1.2 billion estate of tobacco heiress Doris Duke.
At a recent meeting of state securities regulators, Philip A. Feigin, the head of the group and a crusader for the small investor, informed his audience in song that the world of banking is becoming more sophisticated. He warns investors that "the crimes, they are a-changing."
Liberty Financial Bank Group will double its roster of bank clients with its pending acquisition of Wall Street Investors Services, a rival investment services firm. The deal will increase the size of Liberty's client base to 120, making it a serious competitor of bank investment services firms.
Can use: "Top Investment ..." Mac (1 by 5)
Essex Corp. was the top marketer of mutual funds and annuities through banks last year, a consultant said. Aided by its fixed annuities niche, Essex had $42.6 billion of total sales.
Despite uncertainty accompanying its purchase by Norwest, officials at State National Bank of El Paso say the deal can only strengthen their hand as they try to compete for trust customers.
18643 MORTGAGES Use "Why Fannie Mae is Optimistic" Mac Fannie Sees Growth Persisting Till 2000
Fannie Mae is optimistic about its business outlook, both in the near future and for the balance of this decade. The expectation is that Fannie Mae and Freddie Mac will gradually take market share from banks and thrifts that hold the mortgages they originate for investment.
In response to increased competition for home equity loans originated by mortgage brokers, Altegra Credit has switched gears and launched an aggressive campaign to build a retail network. The subsidiary of Integra Financial Corp. has already opened two retail branches.
Intel Corp., the computer technology giant, and Countrywide Credit Industries, the nation's biggest home lender, are teaming up in an experiment that could redefine how mortgages are originated. Video conferencing equipment will connect homebuyers in real estate offices with loan officers from Countrywide and 11 other lenders.
Countrywide Credit Industries dodged a $100 million bullet in its fiscal first quarter. Because of a new accounting rule, the company had to write down its mammoth portfolio of servicing rights by $106.7 million, but a hedging strategy showed gains of $117 million.
Aida Alvarez, the regulator for Fannie Mae and Freddie Mac, said her agency will monitor loans approved by their competing automated underwriting systems.
18647 TECHNOLOGY Hiring Morgan Stanley, Hogan Spurs Sale Talk
Hogan Systems, a bank software firm, has hired Morgan Stanley & Co. to explore "strategic alternatives" for it. The move could be interpreted as a prelude to a possible sale, an analyst says.
Can use "Banking on Big Iron" Mac
Catering in part to continued demand from banks for mainframe computers, International Business Machines has developed a dozen new models for its next generation of large-scale equipment.
Oxxford Information Technology has developed a Community Reinvestment Act compliance service that is also a marketing and analysis tool for investigating and profiling companies as potential small-business borrowers.
International Business Machines has jumped on the electronic commerce bandwagon with its recent product introduction. The computer-network-based products and services are aimed at letting companies manage and secure financial transactions sent over the Internet.
Microsoft Corp. and AT&T Co. have gotten much of the attention lately because of their potential for setting the terms for electronic banking and other types of interactive services. But many experts believe the regional Bell operating companies could prove as potent as any in the anticipated remote banking marketplace.
18765 FINANCE Can use: "In the Catbird Seat" Table Rise in Bank Stocks May Spark Mergers
A surge in bank stock prices this year means banks are again selling for twice book value. Analysts expect the increase in the value of acquirers' shares - the currency banks often use to buy other banks - to spur merger activity.
Banks have difficult work to do in melding the radically different compensation practices of their industry and Wall Street. Executive pay is looming as one of the thorniest of issues.
Can use: "Growing by leaps and bounds" Mac
Derivatives transaction volume soared last year, a new report shows, suggesting further opportunities for banks that trade such instruments. But the report also showed that customers are migrating into plain-vanilla instruments, raising profitability questions.
Banks are returning greater portions of earnings to shareholders through dividend increases, and experts say the trend has plenty of room to run.
Bank stocks sizzled with a vengeance June 13 after enduring a four-day slump. A major bond market rally sparked by surprisingly favorable inflation news carried many bank issues into record high territories.