House Wary of Senate's Quick Fix for Thrift Fund
In a step forward for banks, House Republicans seem to have rejected the Senate's fast-track approach to dealing with the undercapitalized Savings Association Insurance Fund. House members are leaning instead toward merging the bank and thrift industries, their insurance funds, and their regulators.
A key member of the House Republican leadership is fighting a plan that could wind up killing a proposed ban on new insurance powers for national banks.
A New York fed economist suggests that regulators use a bank's own risk management models to determine how much capital it should have.
Sen. Bob Dole introduced legislation that would curb estate taxes, helping banks to keep valuable small-business customers.
Grocery Branches Seen Eating Into Wells' Profits
Wells Fargo may have shot itself in the foot by expanding so fast into supermarket branching. Noninterest expenses rose 3% more in the second quarter than analysts had expected.
Consolidation in the corporate trust sector heated up again as Philadelphia-based CoreStates Financial sold two units to Mellon Bank Corp. and Bank of New York.
Moving quickly to shore up a weakness in merger partner Firstfed Michigan, Charter One Financial named two executives with considerable lending and retail banking experience to lead its new division in Michigan.
The teamsters union filed CRA protests against two of NationsBank's Florida acquisition plans but denied it had anything to do with their labor dispute.
Fidelity Federal Bank, which has been stung by real estate losses and was forced through a painful restructuring last year, now faces a lawsuit by a former employee alleging violations of banking and securities laws.
Merger Mania Leaves Charities Scrambling
Rapid bank consolidation has left many of the nation's cities with fewer locally owned banks - and fewer local CEOs committed to civic participation and philanthropy. The results: Civic and nonprofit groups scrambling for money, and more pressure on the remaining community banks.
The chief executive officer of New Jersey's Commerce Bancorp has made some concessions following discrimination charges by a community group in nearby Philadelphia. But he has drawn the line at opening a branch in down- and-out north Philadelphia.
At $25 million of assets, Baltimore's First Mariner is probably one of the smallest banks with supermarket branches. It is opening at least four.
If it had waited a little longer, Country Club Bank in Missouri wouldn't have needed to get a national charter to branch into Kansas. Under new state laws, state banks less than 30 miles from their common border can branch across the line.
A Loser Flunks the SBA On Selecting Software
A decision by the Small Business Administration to use Fair, Isaac & Co.'s credit-scoring software for processing low-documentation-loan applications has at least one competing supplier - TRW -very upset.
ComptrollerSeeks Tips On Enforcing CRA Rules
In two documents being circulated quietly, the Federal Reserve and the Office of the Comptroller of the Currency are soliciting ideas on how to enforce some of the most controversial aspects of Community Reinvestment Act rules adopted in April.
Recent statistics show banks doing a better job than other companies at promoting equality in the workplace.
NCUA's Head-Knocker For the Corporates
H. Allen Carver, top examiner of corporates at the National Credit Union Administration for the past year, has made tough supervision and tough new rules the hallmarks of his reign.
The NCUA board has proposed to relax loan participation rules to stimulate lending.
An Information System For MasterCard Members
MasterCard International said it has begun development of a massive global information system for its members, using data base technology from Oracle. The first stage of the service, called MasterCard On-Line, is scheduled for a September debut.
American Express Travel Related Services has made its long-awaited entry into credit card cobranding through a marketing partnership with Delta Airlines.
Receivables of the top 10 credit card issuers continued to grow steadily in the first half, despite declines in consumer spending and government reports pointing to a general economic slowdown.
Wells Fargo Bank began testing a Mondex smart card system, giving the highly touted "electronic alternative to cash" its first operating foothold in the United States.
'94 Was a Down Year For Bank Broker Pay, Too
Last year's mutual fund rout took its toll on bank brokers, whose pay fell 17%, a new study finds. Compensation averaged $67,000, a bit over half what nonbank brokers made.
Founded in 1907 to manage a steel magnate's fortune, Bessemer Trust has evolved into a full-fledged private bank catering to exceptionally wealthy. "Most people don't like to talk about their money," says John Whitmore, Bessemer's chief executive officer. "We understand that."
Still rattled by last year's bond slump, bank customers are buying short-term bonds instead of shares in long-term bond funds. In a round of interviews, many bank brokerage presidents said their customers feel more comfortable with individual bonds.
Eight fund operators, including Mellon and BankAmerica, are mailing out simple prospectuses as supplements to the legalistic ones that have become the bane of many investors. Debra McGinty-Poteet, who runs B of A's Pacific Horizon Funds, said close tabs will be kept on how shareholders accept and understand them.
Profits at Fannie, Freddie Set for Long-Term Slide?
A leading analyst said mortgage spreads at Fannie Mae and Freddie Mac are in a long-term decline that will depress earnings growth. He downgraded the stocks to "market perform," saying the agencies' aggressive efforts to expand their portfolios was driving down mortgage prices and return on equity more than anticipated.
The rocky mortgage market is taking a toll on the industry's top executives. Wild market fluctuations are starting to burn them out, and the culture clashes and other pressures after acquisitions by banks are also thinning the ranks.
Giant GE Capital Mortgage says it will no longer make home loans directly to the public. The retail channel had never been a big source of loans, and the company decided to wind down the business over the next few months.
The National Association of Mortgage Brokers, beset with internal strife over much of the past year, seems to be regaining its footing.
Lessons from Cards For the On-Line World
Bankers are looking to their credit card experiences for clues about how to project their identities and hold on to customers in an on-line world. They say the lessons they learned with MasterCard and Visa can apply to the delivery of banking services in tandem with personal computer software from companies like Microsoft and Intuit.
Top executives of the nascent electronic money industry thought the congressional hearing would be a cakewalk. Then the focus shifted to the dreaded R word - regulation.
The New York Clearing House Association is purging settlement risk from electronic funds transfers by introducing a minimum collateral requirement of $10 million per bank and ordering a 20% cut in net debit limits.
Moody's Starts Rating Safety and Soundness
Moody's took a component of its debt and deposit ratings, the safety and soundness of individual institutions, and established a new rating system.
J.P. Morgan and Chemical wasted no time coming to market with their $7.5 billion loan to Westinghouse for its acquisition of CBS. One day after the purchase was announced, the lead banks started seeking commitments from other banks to underwrite one of the largest leveraged finance deals since the heyday of LBOs in the late 1980s.
The race is on to lead the estimated $10 billion to $15 billion financing for Disney's purchase of Capital Cities/ABC. Bankers said Citicorp apparently has the inside track, since it led a $1 billion credit to support a commercial paper offering for Disney in April. BankAmerica was also mentioned as likely to lead the deal.
Ira Stepanian's surprise resignation as chairman of the Bank of Boston set the stage for its sale, analysts and investors said. The departure capped a turbulent week in which he failed to forge a merger of equals with CoreStates Financial.