WASHINGTON Ludwig, Once Feared, Proves a Staunch Ally
When Eugene A. Ludwig took over as comptroller of the currency in April 1993, bankers hardly knew what to expect. As Mr. Ludwig nears the halfway point of his five-year term, the Office of the Comptroller of the Currency has emerged as an ardent advocate of new powers for national banks, a critic of overregulation, and a persistent battler for Washington turf.
An ABA committee reluctantly presented a draft framework for derivatives accounting. Not all the panel members were happy with the proposed rules, the head of the panel told the Financial Accounting Standards Board; he called them "grudgingly accepted guidelines."
House Republicans vowed to eliminate, not just cap, the administration's student loan program, which they said costs too much. William F. Goodling, chairman of the House Economic and Educational Opportunities Committee, said Republicans will attempt this fall to fold into the House budget reconciliation bill a measure that would ax the program.
National banks have won the right to sell annuities throughout Connecticut, the insurance industry's home field. The state Insurance Department agreed to settle part of a lawsuit Shawmut National Corp. had filed last year challenging state restrictions on bank insurance activities.
In the first such application under the 1994 interstate banking law, NationsBank has asked the Office of the Comptroller of the Currency for permission to merge its Virginia and North Carolina banks.
A prominent community group proposed a new way to measure how well banks serve minority communities, and at least one large bank is applauding its approach. The San Francisco-based Greenlining Institute wants enhanced Home Mortgage Disclosure Act reports that supplement rejection rate statistics with data about the number of loans actually made.
19326 REGIONAL BANKING Growing Assets Back in Vogue Again
Banks are getting bigger. After years of stressing profits over size, the world's top 200 banks boosted their assets by a hefty 15% in 1994, according to an American Banker survey. And the trend has accelerated in recent months with a global boom in mergers.
Norwest Corp. said it would buy Amfed Financial Inc. of Reno for about $197 million in stock. The acquisition, expected to be completed early next year, would make Nevada the 16th state in which $67 billion-asset Norwest has a consumer banking presence.
Last year's rate hikes were still being felt at some Midwest banks and thrifts in the second quarter, including Cleveland-based Keycorp, which reported net income down 10.3%. Charter One Financial's earnings rose 5.8%.
Bank of America has recruited Kathleen Brown, daughter and sister of California governors and last year's Democratic candidate for the job, to its investment management and private banking group. California bankers and consultants say that on the basis of name recognition alone, it was a slam- dunk hire.
National City Corp.'s David Daberko has his job cut out for him when he takes over as chairman Sept. 30. He'll have to focus the Cleveland company on new retail delivery systems, observers say.
19330 COMMUNITY BANKING A Growing Business: Minding the Farm
Farms are proving to be more fertile than ever - not for farmers, necessarily, but for the banks that have carved out a lucrative niche in managing them. Agricultural banks are among the companies filling the shoes of owners who leave the farm - and are boosting fee income doing it.
W. Ronald Duffey never would have landed the business of a church being built in his Peachtree National Bank's home town if a community bank down the road hadn't referred the minister to him. The banker passed along the highly desirable customer because the two banks are both affiliates of Synovus Financial.
Small-town banks in the West are hoping that a boomlet in loan demand will carry their gains of the first half through the margin squeeze of the second half.
BNC Corp. is not a do-nothing bank. The $175 million-asset North Dakota company is selling one of its three banks, acquiring six branches, and planning a start-up in the competitive Minneapolis market - and it has just completed an initial public offering.
Southern California's economic troubles have hurt Los Angeles-based Metrobank, but that didn't stop Comerica from offering 1.7 times book. Why? It's one of a handful of small banks that offer a foothold in the areas' hotly contested market for small business customers.
19404 SMALL BUSINESS Chemical Banking On a Street-Smart Pro
Forget the high-pressure sales pitches. Frank Lourenso, middle-market banking chief of Chemical Banking Co., has parlayed 33 years of street- level experience into a knack for bringing small businesses in through the door.
19256 COMPLIANCE Leach Stumps Home Turf For Regulatory Relief
When House Banking Committee Chairman Jim Leach traveled home to Iowa one weekend to talk with community bankers, compliance was on his mind. He told them that burdensome compliance requirements will force the industry to consolidate and become less responsive to community needs.
Lawyer David F. Scranton, a partner Stradley, Ronon, Stevens & Young in Philadelphia, says private bankers need to know a lot about compliance in lending to provide the speedy service their customers demand.
19338 CREDIT UNIONS CUNA Card Unit Has Big Plans -- Too Big?
Detractors say Keith Floen's cards services group at the Credit Union National Association has bitten off more than it can chew. He says the group, about to raise up to $30 million for a push into electronic funds transfer, is poised to become a crucial service provider for credit unions.
Norman D'Amours, head of the National Credit Union Administration, says credit unions risk losing tax exemption and other advantages unless they remain true to their purpose - serving people of small means.
19025 CREDIT/DEBIT/ATMs Amex Goes On-Line with Small-Business Forum
American Express is reaching out to small businesses with its latest offering via America Online. Amex is using its on-line site, ExpressNet, to position itself as an expert and resource through a service it calls Small Business Network. July 24
Seven northeastern states have allied to invite bids for an electronic benefits transfer system. Banks and transaction processors are expected to enter the bidding, trying to rack up the processing fees and use the experience as an entree to other government work.
Verifone has joined the Object Definition Alliance, a multi-industry group organized by Oracle Corp. to create technology standards for electronic commerce. The alliance wants to facilitate transactions over multimedia networks like the Internet.
Star System, the biggest regional ATM network, has fought national competitors by focusing on its West Coast market, outsourcing, and running lean. Now it is looking for new markets.
Deluxe Data Systems and Concord EFS have settled a lawsuit in which Concord charged Deluxe, a transaction processor, with violating antitrust law in carrying out a contract to handle Maryland's electronic benefits transfer program.
18987 INVESTMENT PRODUCTS Lower Yields Put Brakes On Sales of Small CDs
CD yields are falling like a brick in the wake of recent moves by the Federal Reserve Board. And along with the yields, the flow of funds into time deposits of less than $100,000 continues to dwindle, according to preliminary data from the Fed.
As investors become less inclined to pay sales fees to their brokers, some banks are cautiously exploring the idea of offering no-load mutual funds. Keycorp and BankAmerica are among the banking companies evaluating selling phone marketing of proprietary no-load funds, according to industry sources.
Banks spent $2.5 million to advertise mutual funds and annuities in the first quarter, 77% less than a year earlier, as CD rates became more favorable.
JMC Group, the annuity marketer stung by a Florida insurance department crackdown on its activities at Barnett Banks Inc., lost $335,134 in the second quarter. JMC, which supplies brokers to banks, earned $255,528 a year earlier.
19349 MORTGAGES An Affinity Lender Makes a Name for Itself
Never heard of H. Robert Nagel's PHH US Mortgage? Join the club. The nation's second-biggest home lender to affinity groups has cultivated name non-recognition, but a new coup has put it in the limelight.
Fred B. Koons, chairman and chief executive of Chase Manhattan's mortgage banking subsidiary, suddenly resigned. Succeeding him is Richard A. Mirro, the unit's chief operating officer for originations. July 24
Lenders and customers are starting to make big use of the Internet. A recent search on the worldwide computer network found 102 sites related to home mortgage lending.
19279 Officially, registration at the Western League of Savings Institutions' secondary market meeting was down only 5% from last year, to about 1,000. But several participants said the conference, held in the shadow of a shrinking mortgage market, seemed much smaller, and lacked energy.
19316 TECHNOLOGY Microsoft Corp. Takes a Run at Intuit
Microsoft's decision to offer Money, its personal finance software, for free has upped the ante in the struggle with Intuit's Quicken for home banking dominance, bankers and other observers say. July 24
Chemical Banking Corp. has appointed Yawar Shah as general manager of its global treasury management services. Global treasury management is a new unit within Geoserve, the bank's fee-based services subsidiary.
Photo: p.12, Yawar Shah
Searching for new customers, a community bank in Louisiana is using technology to expand service beyond traditional branches.
A decision by Ameritech to de-emphasize screen telephones has led Citicorp to modify its ambitious plans to market remote banking services in the Midwest. The change of course may extend to Citicorp's overall home banking effort, which is said to be looking toward personal computers as the preferred delivery mechanism.
19439 FINANCE Money-Centers Tap New Market for Debt
Wall Street has discovered a new outlet for bank debt: the individual investor. Three New York money-center banks have sold about $500 million of medium-term notes to retail investors in the past year, saving up to 25 basis points off the cost of more traditional issuance to institutional investors.
Just because the market helped kill the Bank of Boston-CoreStates Financial deal, don't assume that all mergers of equals will be shot down. Wall Street analysts and institutional investors said their objections to the prospective pairing of Bank of Boston with CoreStates had been specific to the deal, and not necessarily indicative of their general feelings towards mergers of equals.
Bankers shouldn't read too much into recent hints that the economy is coming out of the doldrums. Several economists agree that bankers ought to be planning for lower interest rates by the end of the year, despite Federal Reserve Chairman Alan Greenspan's talk of improving business conditions.