Bailout Tab Deductible,U.S. Assures Thrifts
Treasury Department officials are scrambling to quell fears that money paid to capitalize the Savings Association Insurance Fund will not be tax deductible. Losing the tax writeoff could add about $2 billion to the thrift industry's tab.
Another group of banks with thrift deposits is mounting a campaign to get its tab for the Savings Association Insurance Fund rescue reduced.
Developers of stored-value smart cards have argued they should be treated like cash rather than like credit or ATM cards. Now some lawmakers are finding value in that argument.
Administration officials blasted House Republicans for trying to bar banks from the insurance business. "We see the Glass-Steagall legislation as a step in the right direction," said Treasury Under Secretary John D. Hawke Jr., "but there is nothing so attractive in that legislation that we would want to see it go ahead if there were significant insurance prohibitions attached."
Big Trading Losses Seen Pointing to Need For Tighter Controls Trading losses at Daiwa Bank - following similar incidents at Barings and Chemical - mean banks need to intensify internal controls, bankers and analysts said.
A lending consortium is being launched in California for needy small businesses. It is billed as the largest and most ambitious effort of its kind.
Taking advantage of the banking crisis in Argentina, Citicorp is bidding to acquire some of the operations of troubled Banco Federal Argentino.
Firstar Bank of Milwaukee alleges that a vast Midwest cattle empire was nothing more than a house of cards, and that its owner ran one of the biggest and most elaborate check-kiting schemes ever.
BankAmerica has shaken up its private bank. Bank spokeswomen said strategic and personal reasons lay behind the displacement of the heads of California and of international private banking. But a source said disappointment with the performance of the units they led could also have been a factor.
Offspring Squabble Over Whether to Sell
Hatfields versus McCoys? Not exactly, but the founding families of Cole Taylor Financial of Wheeling, Ill., are embroiled in a rare public tiff. The Coles want to investigate sale; they Taylors emphasize that independence has paid off for shareholders.
New England community banks bought all the branches Fleet and Shawmut agreed to divest so they could merge. Contrary to speculation that another regional would sweep up the whole bunch, seven community banks and a Rhode Island investor group won the 64 branches in four states.
An early frost in the Midwest could put a chill on some banks' agricultural loan portfolios. But banks are in good shape to face the test, experts say.
Boston Bancorp has named a new top executive almost eight months after its top two officials resigned following regulatory criticism. The move could put to rest rumors the thrift company is preparing to sell.
Congressional debate over the thrift insurance fund appears to be reducing commercial banks' appetite for thrifts. thrift acquisitions have fallen markedly in the months since lawmakers started debating the future of the thrift charter and how much holders of thrift deposits pay up to recapitalize the Savings Association Insurance Fund.
SBA Budget Back After Week on Brink Thanks to the intercession of a powerful committee chairman, it appears the Small Business Administration will be able to keep funding loans at its current levels.
Community Reinvestment Exam Forecast: A Breeze
The new procedures for CRA exams will be short and sweet, government officials say. No volumes of procedures to comply with, just some questions to answer. "We've got five criteria to cover," said Theresa Stark, a program analyst with the Office of Thrift Supervision. "If those are answered satisfactorily, there won't be much more to ask."
To implement the National Flood Insurance Act of 1994, six regulatory agencies will soon unveil proposed rules for comment.
Emerging Trend Seen In Risk-Based Pricing More and more credit unions are bucking tradition by pricing loans according to the riskiness of the borrower, according to industry sources.
Targeting first-time homebuyers strapped for a down payment, Coastal Federal Credit Union of Raleigh, N.C., has started offering first mortgages with 100% financing. The product is similar to Fannie Mae's 97% Community Home Buyers Loan, which Coastal Federal had been offering since May - with minimal results.
The Credit Union National Association lost a battle to continue sharing management of corporate credit unions, the industry's liquidity centers. "The record is replete with legitimate reasons for the NCUA's determination that interlocking boards and management create actual conflicts of interest," wrote U.S. District Judge Claude M. Hilton. The trade group said it might appeal his decision.
The NCUA adopted a rule letting some credit union employees - but not senior executives - receive bonuses related to loan volume. The regulator also issued for comment a proposal to put new restrictions on credit unions seeking to bolster membership by creating affiliated clubs for senior citizens and retirees.
Affiliated Computer, Striving For No. 1, Adds 450 ATMs
Affiliated Computer Systems, the nation's third-largest deployer of automated teller machines, signed a big contract that adds more than 450 new units to its already huge network.
Richard W. Vague has been promoted to chairman and chief executive of First USA Bank. Succeeding him as president is Randy L. Christofferson, who was president of American Express Relationship Services.
MasterCard International has posted draft specifications on security technology for credit card payments over on-line networks on its World Wide Web home page in response to Visa and Microsoft's standards.
Matchmaking has a double meaning for Advanta. The affiliate of credit card and home equity specialist, always on the prowl for consumer-oriented, information-intensive companies, has taken an equity position in a video dating service.
A Standard & Poor's study of credit card companies indicates a close correlation between revenues and bottom-line profits and questions the usefulness of a widely followed efficiency indicator - the ratio of expenses to receivables.
Visa and Microsoft took a bold strategic step in proclaiming the availability their on-line transaction security standard. There was just one problem: Critics - and there are many - say they jumped the gun.
NationsBank Poised To Buy U.K. Partner
A bidding war has erupted over British money manager Gartmore - and NationsBank, which recently entered a joint venture with the firm, is holding some of the high cards. Paris-based Banque Indosuez placed its 75% stake in Gartmore on the market, triggering NationsBank's option to buy up to a 25% position.
They don't get as much publicity as stock and bond funds, but money market mutual funds have been growing steadily in recent years. And that's benefiting commercial banks, which manage an ever-increasing share of the assets in these funds.
John S. McCune knew early in life he had a knack for selling. Now, as president of Norwest's brokerage unit, he is sharply focused on meeting - and beating - the competition. "We expect sales, we expect volume, and we want it done the right way," he says.
Eaton Vance Corp., a mutual fund company known primarily for its fixed- income portfolios, wants to break out of that mold by selling a variety of new specialty funds through banks.
U.S. Home Lenders Eye Mexico Market
Latin America looks like the next frontier for mortgage banks. A few, including Weyerhaeuser and Inland, are already making preparations to head south.
Lenders smarting from the consolidation that has cut their ranks now have somewhere to turn - south of the border. Job opportunities are becoming available with Latin American lenders that want to emulate their U.S. counterparts.
BankAmerica aims to build its portfolio of high-balance, low-risk home loans to relocating executives, through an alliance with Coldwell Banker.
John Robbins, passed over as Chemical's mortgage chief at the last minute, denied the existence of a rumored seven-figure signing bonus - supposedly consolation for being nixed by Chase management.
Praise and Warning From a Star Analyst
In the keynote address at a Bank Administration Institute conference on home-based financial services conference, Donaldson, Lufkin & Jenrette's Thomas K. Brown praised some cutting-edge efforts banks and encouraged the industry as a whole to "radically reengineer" through technology. Those that don't change dramatically, he warned, will look like the dinosaurs Microsoft's chairman says banks already are.
Matthew P. Lawlor bristles when he's described as developer of the ScreenPhone for home banking. It's true, but he wants his company, Online Resources and Communications, to be recognized for its more diversified financial and processing services.
The breach of Netscape Communications' encryption system has increased concern about providing financial services over the Internet. But few expect that the incident will cause bankers to significantly curtail their involvement in on-line banking.
Home banking strategists have not entirely lost faith in screen telephones, but they have certainly scaled back their expectations. "We don't want to be a phone company," Bruce Luecke, vice president of alternative delivery at Banc One, said in a recent interview. "We just want to be a button on the phone."
A leading in-house advocate of the Chicago Clearing House Association's nascent electronic data interchange network has been hired away by a bank software firm.
Banks Double Share of Bank-Debt Underwriting
Banks' capital market operations won a 25.7% market share in underwriting bank debt in the third quarter, up from 11.5% a year earlier. Analysts said banks' gains in general could be attributed to their in-house deals.
Treasurer John Mack says that about two-thirds of NationsBank's second $3 billion shelf registration of the year will be used to support its capital-intensive finance companies.
Wachovia, a fairly infrequent issuer of debt into the capital markets, has joined the fray by selling $250 million in 30-year notes.
Chemical Securities' chief economist says banks should stop waiting for interest rates to fall further. James E. Glassman regards the current level of rates as "a small price to pay for healthy economic activity."
PNC will keep using swaps to manage rate sensitivity even after it completes its balance sheet restructuring. Deals for Midlantic and for Chemical branches will virtually eliminate liability sensitivity, said Randall King, senior vice president of asset and liability management, at a International Swaps and Derivatives Association conference. Still, the bank will use shorter-term swaps to lock in funding costs, he said