Regulators Raking It In - 119 Will Top $150,000
Fully 119 employees of the four federal banking agencies will take in more than $150,000 each in salary and bonuses this year, according to data provided in response to Freedom of Information Act requests by American Banker.
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Draft guidelines for examiners fall far short of delivering the relief from paperwork that bankers had expected under new Community Reinvestment Act rules. Bankers who have seen the draft - the regulators have not publicly released it - said it appears that all the agencies have done is incorporate the existing 12 assessment factors into tests for lending, service, and investment. "Nothing has changed," one banker said. "We are not out of the 'needs assessment' business."
Ask Ricki Helfer about the big issues she faced during her first year as FDIC chairman and she doesn't breathe a word about the bank or thrift funds. Instead she stresses what she's doing to overhaul the agency.
Fed Vice Chairman Alan S. Blinder said that government should not yet regulate smart cards and other emerging forms of electronic money. Stored- value cards could hamper the Fed in managing the money supply, he acknowledged, but it "has not the slightest desire to inhibit the evolution of this emerging industry."
Taking strong exception to a senior U.S. Treasury official, House Banking Committee Chairman Jim Leach said the $25 billion in the Insurance Fund belongs to the banks, not Uncle Sam.
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CoreStates to Acquire Meridian for $3.2 Billion
CoreStates announced a definitive agreement to acquire Meridian Bancorp of Reading, Pa. The partners said the deal would create "the hometown banking company" for eastern Pennsylvania, northern Delaware, and central New Jersey. The $3.2 billion acquisition would be the eighth-biggest ever in U.S. banking and create the industry's 20th-largest company, with $45 billion of assets.
Bank of Boston agreed to acquire Boston Bancorp, parent of a leading thrift in the area, in a deal with an estimated value of $220 million. Experts said the deal, which follows a series of failed attempts by of Boston to find a merger partner, showed that it was not pinning its hopes entirely on merging with another big bank or being acquired.
Legendary bank investor Harry V. Keefe Jr. says the worst beating he hasever taken on an investment in a bank or thrift has been on his stake in struggling Fidelity Federal.
America has installed new leaders for its substantial wholesale and international units.
Citicorp, which likes to pride itself on its expertise in emerging markets, has run into some trouble in its Latin American loan portfolio.
Citicorp lost more than $40 million in loans to failed Argentine banks, sources report, including more than $30 million to Banco Extrader of Buenos Aires. As a result, three senior credit officers of Citicorp Argentina were forced to leave the bank, the sources said.
Argentine bankers and analysts said Citicorp may also have lost up to $7 million more in loans to Finmark, a brokerage firm based in Buenos Aires which went bankrupt late last year.
In addition, analysts noted Citicorp's problem loans are on the rise in Colombia, Mexico, and Brazil - three countries where banks have had to increase provisions in response to economic instability.
Polls Shows Bankers Have an Image Problem
Most consumers hold a low opinion of bankers and don't think they're involved in their communities, a Gallup study found.
It's been a long four months for Merrill Sherman and Malcolm "Kim" Chace 3d. But it all paid off when they announced plans for the largest banking start-up in New England history.
Criticism of the spreads imposed by Nasdaq's market makers is pushing some conversion-minded mutual thrifts into the arms of the equity market's also-ran, the American Stock Exchange.
It probably ranks among a bank chief executive's worst nightmares: A director blabs to a reporter about a split on the board over the company's future.
Only eight months after going public, a Michigan thrift is mired in a proxy fight over its future. SJS Bancorp's largest shareholder, a Detroit stockbroker who has pressured two other Michigan thrifts into selling, wants to place on the board two directors of his choosing - who would likely push for a sale.
Norwest Tries to Show It Is Not Indifferent
Norwest's Twin Cities unit is moving to dispel the notion among small businesses that it's remote and out of touch.
It Isn't Shakespeare, But They're Trying
Quotes from the famous and profound line the walls of Irwin Professional Publishers, which puts out the Line books and manuals. The idea books is to inspire the editors. "We're dealing with professionals, not professional writers," says one.
Despite Comptroller Eugene A. Ludwig's comments that draft Community Reinvestment Act exam procedures are being junked, parts of the controversial guidelines are expected to survive.
The regulators are aiming to complete new rules on interest rate risk by Jan. 1, Susan Krause, senior deputy comptroller for bank supervision, told bankers attending the American Bankers Association's annual convention in San Francisco. The rules, designed to incorporate interest rate risk to capital standards, would require banks to evaluate the interest volatility of their loan portfolios.
Youth Programs Grow as Rx for Aging Membership
With an eye toward bolstering membership for the long term, a growing number of credit unions are running programs to sign up young adults.
Eastman Savings in Rochester, N.Y., is on the brink of becoming the first thrift to convert to a federal credit union.
The Credit Union National Association won't appeal a court ruling that upheld a federal regulation severing management interlocks between trade groups and corporate credit unions, the industry's liquidity centers. CUNA is hoping to cool the its 16-month feud with the National Credit Union Administration over governance of the corporates.
Nacha Hit for Push on Benefits Transfer Rules
Organizations that represent banks, retailers, and transaction processing companies have lined up against the National Automated Clearing House Association's plan to organize a rulemaking body called the Electronic Benefits Transfer Council.
American Express stepped on Visa's sponsorship turf by signing a multiyear, multimillion-dollar marketing deal with Dallas Cowboys owner Jerry Jones to become the official charge and credit card of Texas Stadium.
After other financial institutions refused, Travelers Group's Travelers USA issued a Visa card meant to benefit gay and lesbian causes.
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Illinois-based Elan Financial Services, a unit of Firstar, will offer a cobranded MasterCard program to frequent fliers of regional airline Midwest Express.
Bell Atlantic has made it a clean sweep; now all the Baby Bells have joined the cobranding fray. Charles A. Schmidt of First Omni in Delaware, which will issue Bell Atlantic's card, said the deal "will really put us on the map."
Banks Going After Fund Wrap Accounts
Bankers are hungrily eyeing mutual fund wrap accounts, which are booming as consumers turn to professionals for help with their investment decisions. The attractions: fee income that averages almost 1.5% of assets annually and the opportunity to lift sales of proprietary funds.
Signature Financial Group is moving to expand its market by licensing the use of its closely guarded approach to managing mutual funds. After six months of negotiations, the Boston-based fund administrator has struck a deal that lets Federated Investors market Signature's hub-and-spoke fund structure to Federated's 2,000 bank clients.
Banks are coming under renewed pressure to refrain from selling their own mutual funds more aggressively than those run by other companies.
Allstate Life acquired Laughlin Group, an Oregon company that manages insurance sales programs for 150 banks. The big insurer, which last sold about $550 million of annuities through 20 banks including PNC, SunTrust, and CalFed, said Laughlin would help it boost insurance sales through the bank channel.
The market for public-sector retirement plans has been dominated by specialized firms and insurance companies. But many banks are now jumping in with bank-run mutual funds.
Second Bankruptcy Filing Spells Curtains for Lomas
The final dirge has sounded for the once-mighty Lomas Financial. The former mortgage-lending powerhouse, the idol of the industry in the 1980s, filed for Chapter 11 protection again, after emerging from bankruptcy less than four years ago, and has made a deal to sell its remaining assets.
One big surprise in a study that showed increased activity in point of sale business: Such originations are resulting in cleaner, higher-qualitymortgages.
Home sales have dropped sharply in Southern California and south Florida, according to TRW Redi Property Data.
Following the lead of other large lenders, a unit of GE Capital will be entering the B and C loan business this month.
Wachovia to Pass Along FDIC Premium Rebate
Wachovia's treasury services group said it will pass along to its corporate customers its share of the FDIC's $1.5 billion deposit insurance rebate. The bank said it was doing so "in the spirit of cooperation and partnership."
Getting on-line with the newest personal-finance software from Intuit and Microsoft is less than automatic, some bankers have learned.
AT&T has introduced a new family of large-scale computers designed for transaction processing and relationship banking applications.
NationsBank has begun moving its corporate customers to a centralized cash management system that makes use of new interstate banking regulations.
Targeting the "mainstream corporate environment," Sun Microsystem is introducing a line of interactive video servers for financial institutions and other organizations.
Street Now Says Most Gaints Gained in Quarter
Thirty-seven of the top 50 United States banks will report higher third- quarter earnings if the Wall Street consensus is correct. Analysts cited stable interest rates, healthy net interest margins, and the cut in Federal Deposit Insurance Corp. premiums.
The market capitalization of the nation's 100 largest banking companies surged 14.7% during the third quarter to a record $386.6 billion. That's the best quarterly gain in market value in nearly four years, and challenges the perception that bank stocks invariably do badly in the second half.
The usual early-autumn falloff in bank bonds hasn't materialized. Not only have the securities maintained their appeal for investors, they have actually shown some improvement in the last few weeks, after a summer of consistent and strong performance.
Who's to run derivatives at merger-bound First Chicago and NBD Corp.? First Chicago's derivatives group seems to have the inside track. In a record-setting September, the group generated 40% more revenue than a year before and pushed January-September results toward 1993's record for the nine months.
Heavy insider selling of Imperial Bancorp stock from June through August suggests that executives at the $2.6 billion-asset California company are skeptical about takeover speculation.
PNC came out swinging at critics of its planned buyout of Midlantic, asserting in a proxy statement that the deal would generate a higher return for shareholders than any alternatives - including the share-repurchase program it shelved.