Executive Briefing

WASHINGTON

Fed May Have to Close Daiwa's N.Y. Branch

The unfolding scandal at Daiwa Bank Ltd. may force the Federal Reserve Board to take the unprecedented step of revoking the Japanese institution's New York branch license, banking attorneys say.

October 24

18789

Seeking support for his Glass-Steagall bill, Rep. Jim Leach proposed lifting a $16 billion obligation from banks and thrifts and placing it on the shoulders of Fannie Mae and Freddie Mac.

October 23

18557

It's not quite the "fresh start" thrifts wanted, but legislation by the House Ways and Means Committee would free them from paying back taxes on most, if not all, of the bad reserves they have accumulated over the past 42 years.

October 25

18824

Legislation pending in the House would require creditors to consider a bill paid as of the date it was mailed - which banks say would cost them a fortune.

October 25

18812

After years of waiting, bankers are optimistic that Congress will finally restore some luster to individual retirement accounts.

October 23

18524

REGIONAL BANKING

1st Interstate Chief Finds a Political Ally

The Wells Fargo buyout of First Interstate is still a proposal, not a deal, but that hasn't prevented Los Angeles Mayor Richard Riordan from staking out an early political position. The mayor is afraid that if Wells bought L.A.-based First Interstate, the ensuing job loss would seriously harm the local economy.

October 26

18876

Healthier local economies boosted loan volume and helped push up third- quarter earnings at many large regionals.

October 25

18815

HSBC Holdings, the London-based parent of Marine Midland Banks in Buffalo, has emerged as the likeliest buyer for most of the U.S. banking operation of National Westminster Bank PLC, say sources close to Marine Midland.

October 24

18794

Robert M. Freeman, chairman and chief executive of Signet Banking, said he will retire at the end of next year at age 55. Mr. Freeman made the Virginia bank a pioneer in the use of direct-mail marketing.

October 26

18877

Pittsburgh-based Integra said it would eliminate 1,500 jobs as a result of its pending merger with Cleveland's National City. "The big job loss will be in the back office and support function," said the CEO, but "executive management will also get hit."

October 27

18913

COMMUNITY BANKING

A Quarter of Modest Gains in the Southeast

Small banks and thrifts in the Southeast recorded mostly modest earnings gains in the third quarter, with performances marked by solid loan demand, tough deposit competition, and sustained margins.

October 26

18847

As if dealing with nationwide interstate banking and branching weren't taxing enough for community bankers, many also face uncertainties over how they will be taxed.

October 26

18855

Arnold Horvath and Robert Jablonski started Prestige State Bank five years ago. Today it is not only the fastest-growing bank on the East Coast but also the top Small Business Administration lender in New Jersey.

October 24

18765

Stocking a board with inside directors is one way of achieving harmony and support for a chief executive. But how many inside directors should a bank's board have? The fewer the better, observers say.

October 25

18816

Community banks in Connecticut are already profiting from the planned merger of Fleet Financial Group and Shawmut National. Smaller banks in the Hartford area raked in retail deposits in the first half.

October 27

18905

SMALL BUSINESS

Securitization Growth Looking Inevitable

The market for securitizing small-business loans will grow over the next several decades without additional government assistance, writes the Minneapolis Fed's Ron Feldman. But the effects will not be uniform, he says, not will all small business borrowers and lenders view them as improvements.

October 24

18779

COMPLIANCE

A Fed Freebie to Boost Low-Income Lending

The Fed is giving banks software designed to increase mortgage lending to low-income borrowers. If an application is rejected, the program comes up with changes that could make it acceptable.

October 26

18879

While regulators are crafting new examinations for the Community Reinvestment Act, examiners will focus on five of the current 12 assessment factors.

October 26

18846

CREDIT UNIONS

More California Groups Drop State Charters

California credit unions are switching to federal charters to avoid taxes. Five did so in the first nine months of the year, and more are expected to follow.

October 23

18547

Federally insured credit unions are in for a big treat this Halloween: a $103 million rebate from the insurance fund. The refund checks approved by the National Credit Union Administration will be mailed to federally insured institutions Tuesday.

October 23

18546

CREDIT/DEBIT/ATMs

Debit's Still Struggling To Turn the Corner

"Our journey will not end until we replace all cash and checks with some form of electronic equivalent," said the keynote speaker at the POS Today conference in Dallas. The general feeling, though, was that the journey has hardly begun.

October 27

18898

Jean McKenna of Visa brings a new perspective to the chairmanship of the Smart Card Forum. Elected in September, Ms. McKenna expects to have to apply her organizational skills as the fast-growing, 220-member association enters a new phase.

October 26

18848

Visa's Interlink on-line debit network has eliminated fees for independent sales organizations that are registered to sell the card association's other services.

October 25

18797

If the Cirrus board agrees next month, a consumer holding an ATM card with a Cirrus logo could make deposits at any machine in the network. But industry sentiment seems to be running against the idea.

October 23

18544

INVESTMENT PRODUCTS

Fidelity Thrives By Serving Niches

Paul Hondros, president of Fidelity Investments' institutional services unit, says its marketing separately to banks' trust departments and retail brokers works because "right now we're the only firm that understands both businesses."

October 25

18820

Banks have long been havens for slow, steady savers. But can bankers can depend on them to make mutual fund programs profitable? It's a question many bank executives are grappling with. Experts say fund accounts need to average at least $5,000 to be profitable, but many banks eagerly accept any sum at all.

October 23

18554

Chase is forging ahead with plans to expand its mutual fund family, even while preparing to merge with Chemical.

October 23

18531

Bankers who manage money market mutual funds are troubled by a new SEC proposal that would require detailed disclosure of the securities in those portfolios.

October 24

18747

Roosevelt Financial Group in St. Louis is strengthening its retail investment program in the wake of an acquisition binge that has quadrupled the thrift's assets over the last two years.

October 24

18749

MORTGAGES

Fannie Warns About Originations by Brokers

The chairman of the Federal National Mortgage Association expressed concern about the rapid growth of wholesale mortgage lending and its impact on credit quality. Speaking at the convention of the Mortgage Bankers Association of America, James A. Johnson said the rate of serious delinquencies on loans originated by mortgage brokers is 150% higher than on other loans.

October 26

18868

The agenda at the annual MMA conference in San Diego had more weighty political items than usual.

October 23

18538

California foreclosures are leveling off after soaring for four years. Analysts cite gains in employment, up a percent or two. "Obviously, you won't end up in foreclosure if you have a job and can continue to pay your mortgage," said a TRW analyst.

October 25

18819

Consolidation was king in the home mortgage servicing industry in the first half, enabling the largest servicers to expand their portfolios far beyond what anyone thought was necessary or possible just a few years ago. The top 25 servicers' volume topped $1 trillion at midyear, 22% more than a year earlier.

October 24

18767

The acquisition market was whipped into a frenzy last year, as once- mighty mortgage giants dissolved and smaller players swooned from interest rate shocks.

October 24

18753

TECHNOLOGY

Holland's Digicash To Show 'em in Missouri

Digicash, the Netherlands-based developer of an electronic cash system for the Internet, began its assault on the United States to from the hinterlands. In a twist on the tendency to introduce electronic money innovations at big banks, Digicash announced Mark Twain Bancshares of St. Louis as the first U.S. licensee of its Ecash system.

October 23

18555

Crestar Financial is installing a branch automation system based on Microsoft's Windows NT operating system.

October 26

18838

Jeanine Brown heads BankAmerica's electronic banking team, which the company created as a separate unit in the hope of making use of its size while remaining nimble. "She's one of the smartest people I ever met," said the head of the company's technology operations.

October 27

18895

MasterCard is said to have deals on the table with Meca Software, maker of Managing Your Money, and with a unit of Servantis Systems. The aim is to help revive the card association's home banking program.

October 24

18787

Chemical and Chase have decided that the new, post-merger Chase would use Chemical's retail deposit and customer service systems.

October 25

18808

FINANCE

Bank Stock Short-Sales Jumped 3.1% in Month

Short interest in bank-related stocks traded on the New York and American stock exchanges grew 3.1% in the month that ended Oct. 13.

October 23

18551

Retail sales this Christmas may be the weakest since the last recession. Retail sales last month, the back-to-school period, were up only 3.1% versus a 6.7% gain a year earlier, excluding automobiles. That foreshadows a sluggish holiday selling season, according to one analyst.

October 23

18550

J.P. Morgan is leading a $3 billion line of credit for State Farm that would give the insurer liquidity in the event of a rash of natural-disaster claims. The syndicated bank loan is the first for State Farm and the latest in a spate of credits to protect insurance companies from huge claims.

October 25

18822

"Bear-hug letters" from uninvited suitors have become more common lately, but they're seldom a cause for alarm, says the co-leader of Goldman Sachs' financial institutions group.

October 25

18821

Bank stocks plummeted, with some Wall Street analysts labeling the setback a bull-market interlude and others warning that investors may have turned cautious on the industry. The slump was felt by nearly all of the nation's 50 largest banks.

October 26

18871

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