House Leaders Plan Broad Bill for Fall Vote
House Republican leaders announced plans to link Glass-Steagall repeal with regulatory reform legislation and bring the combined bill to the floor for a vote this fall. However, the bill would also limit bank insurance powers, stifle the Office of the Comptroller of the Currency, and force banks to move some securities activities to separate units.
The Supreme Court agreed to decide whether states can prevent national banks from selling insurance, promising to resolve years of squabbling between the two industries. The justices accepted a case pitting Barnett Banks against the Florida insurance commissioner.
The $1.5 billion tab facing banks with thrift deposits as Congress bails out the Savings Association Insurance Fund has become a focal point for many members of the congressional banking committees.
Senate Banking Committee Chairman Alfonse M. D'Amato agreed to avoid CRA issues in return for his panel's bipartisan support on other regulatory relief measures.
The OCC is changing the way it examines national banks, by categorizing risk nine ways. In addition to credit risk, examiners will look at rate, liquidity, price, foreign exchange, transaction, compliance, strategic, and reputation risk.
From now on, the Federal Deposit Insurance Corp. will give banks and thrifts a lot less time to adjust to changes in deposit insurance premiums - only 15 days, instead of 45.
Daiwa Loss a Red Flag On Oversight in Trading
A $1.1 billion bond trading loss at Daiwa Bank's New York office - allegedly the result of fraud by one employee over 11 years - is raising concerns about the oversight of trading operations. Observers said executive vice president Toshihide Iguchi could have carried out the trading only if there were no independent "middle office" reviewing his transactions.
ABN Amro North America is buying Chicago Corp. for $135 million in cash, or 1.5 times book value. The new investment banking capabilities and domestic depository activities could make Amro the sort of "universal bank" here that its Dutch parent is in Europe, said the U.S. unit's chief executive.
Top executives of two giant western thrifts - Washington Mutual and California's H.F. Ahmanson - and of Bancorp Hawaii, the island state's biggest bank, gave upbeat assessments of their companies' prospects.
Republic New York aims to cut costs by a third to a half at Crossland Savings, whose parent it is buying for $530 million in cash - about 1.5 times book value. The deal would jump Republic from No. 5 to No. 3 in New York City deposits.
Union Bank and Bank of California, answering the biggest question about their planned merger, said it should save $90 million annually by 1998.
Small-Bank Rebellion At Calif. Trade Group
Some angry community bankers have accused the California Bankers Association with paying mere lip service to their needs while actually catering to the big banks. At least two community banks have quit the group in the aftermath of a bitter fight over interstate branching fight.
A Spanish Bank that had planned to spin off its domestic banking subsidiary on New York's Long Island through a public offering is instead selling it to North Fork Bancorp for $47 million in cash.
Pacific Business Bank, flush with capital and some assertive new owners, is buying another Los Angeles-area bank.
Several bankers in the West have pledged to improve access to financial services - particularly home loans - for Navajo Indians on reservations.
Georgia Bankers reached a historic agreement almost certain to lead the first reform in decades of the state's branching law, one of the most restrictive in the country.
Nonbanks Gain in Small Business;Bank Merger Scrutiny Excessive?
Commercial banks don't have a lock on the small-business loan market, a Fed study indicates - and that may be good news for banks, in a roundabout way. Regulators reviewing merger plans have paid special attention to preservation of local small-business credit, but now some observers, arguing on behalf of banks seeking or likely to apply for merger approvals, say it's time for the feds to ease up.
Mortgage Brokers May Get Break on Disclosure
HUD will consider easing requirements that mortgage brokers disclose all fees paid to them by banks.
Four bank executives were barred from the first examiner training session, in Dallas, on revised Community Reinvestment Act rules. But the four got to present their concerns in a panel discussion.
"Compliance used to be a part-time job," says Everett M. Hannah of Richmond County Savings on Staten Island, N.Y. "Today it's as hard as you want to make it - but if you don't make it hard, you're in trouble." Mr. Hannah was scheduled to deliver the opening and closing remarks this weekend at the national compliance conference of America's Community Bankers.
Old-Fashioned Strategy at Tampa's Suncoast School
Perry Dawson has built Suncoast Schools Federal Credit Union into the Tampa area's biggest financial institution. He says the secret is to practice what he's been preaching for decades - provide the best service at the lowest price possible.
Dearborn Federal Credit Union is replacing its retiring president with - nobody. Its "office of the president" will consist of the heads of three division heads.
Booting deadbeats off the membership rolls is the policy at an estimated 60 credit unions, and the number may be growing.
ISOs Find a Place In the Card Mainstream
Independent service organizations, which some fly-by-night operators gave a bad name, have made a comeback in the card processing business.
As Visa International and Microsoft unveiled a technology standard for payments over open computer networks like the Internet, MasterCard was conspicuously absent.
Affiliated Computer Services, the big in-store ATM operator has formed an alliance with the upstart Cartel network, which aims to put ATMs in supermarkets nationwide.
MasterCard International has added "in-flight commerce" to its list of credit card acceptance categories. By the year 2000, the New York-based card association estimates, consumers will use in-seat video monitors on about 600 long-haul, wide-body airplanes to spend $1 billion a year.
1st Chicago Star Defects To Alliance Capital
Alliance Capital Management has snapped up one of the best-known bankers in the mutual fund business to expand its sales through banks. Richard A. Davies, president of First Chicago Investment Services, will be managing director of the New York-based mutual fund company's bank sales division.
Alps Mutual Fund Services stands apart from the rush to sign up as many banks as possible. It wants only one per region, says president Arthur J.L. Lucey. And as for developing its own mutual funds, "we don't have them and we never will."
Fleet Financial has snared a senior executive from one of the nation's largest insurance companies and entrusted him with the job of building an insurance business from scratch.
First Interstate is planning to give trust clients access to real-time account information with Windows-based software. The program, scheduled to start in November, will let customers generate customized reports instantaneously.
Chemical Exec Will Lead New Chase's Operation
Chemical has tapped its consumer lending chief, Thomas Jacob, to ride herd over the massive mortgage business that will result from the bank's merger with Chase Manhattan.
Great Western Bank, a California thrift, has cut its cost of funds by offering more banklike services, such as CDs and checking accounts.
As banks push into subprime mortgage lending, they are opting to run the programs as separate business units.
Preston Martin, a former Federal Reserve governor, and Dan McConnell, founder of Invest Financial in San Francisco, have joined forces to offer a new product that combines a mortgage and life insurance.
Marc Smith said congressional moves on housing matters will be at the top of the agenda of the Mortgage Bankers Association when he becomes its vice president.
Breakup of AT&T Shouldn't Rattle Banks
The AT&T breakup should have a negligible effect on the unit that serves the banking industry. The work force at the financial industry group, which provides such products as automated teller machines and check processing systems, is to shrink only about 5%. It was spared larger cuts because it has been the most profitable line of business at AT&T Global Information Solutions.
U.S. Order, a screen phone pioneer, has taken its first steps into the PC-based banking business by agreeing to take a 40% stake in a firm that develops interactive financial applications for banks and their customers.
Though many large banks have gotten out of processing for other financial institutions, Philadelphia-based CoreStates has expanded its business.
The Financial Services Technology Consortium, a group of prominent banks, technology vendors, and research institutions, has demonstrated a purchase over the Internet.
BankAmerica officials have signed a contract to install new digital telephone systems for use the bank's 140 foreign exchange and fixed-income- securities traders.
Merger Rally Out of Gas? Short-Sellers Bet It Is
Short-sellers are betting that the merger-related rally in bank stocks has run its course. Short positions in bank stocks traded on the New York and American stock exchanges rose 10.5% in the month ending Sept. 15.
Derivatives dealers are beginning to make a market for credit derivatives, a relatively new type of contract designed to solve banks' perennial problem with loan concentration. But risk managers say bureaucracy at banks is working against the market's growth.
Billionaire investor Warren Buffett will hold at least 2% of Minneapolis-based First Bank System by early next year, a $130 million stake at today's stock price. If the pattern of his previous investments in banks is repeated, disclosure of his stake could presage a major increase in First Bank's market valuation.
Richard Zona, who helped end the slide at First Bank System, has vowed to hold the line against escalating merger prices - and his comments have rankled some of his peers.
Despite rumors that Meridian Bancorp was poised to announce merger plans, the board of the Pennsylvania-based regional emerged from its annual planning meeting with only a general statement of its strategy.