Premium Cut to 4 Cents For Most U.S. Banks
The Federal Deposit Insurance Corp. cut the rate most banks pay for deposit insurance by 83%, saving the industry $4.4 billion a year. Nearly 9,800 banks holding 95% of the industry's assets will pay 4 cents for every $100 of domestic deposits.
It was to be the banking industry's reward for helping solve the thrift insurance fund crisis: a brand new charter featuring some of the powers now enjoyed by savings institutions. But hopes have faded that the legislation will be accompanied by a new-and-improved bank charter.
The Republican sweep last November has forced Rep. Marge Roukema from the sidelines on bank issues. As chairwoman of House Banking's powerful financial institutions subcommittee, the ex-schoolteacher from New Jersey is emerging as a pivotal player in determining the future of banking.
Fair-lending cop Glenn Brewer was no rookie when the Federal Deposit Insurance Corp. hired him. He'd begun fighting discrimination as a tester for a civil rights group; the FDIC spotted him on "Prime Time Live."
BankAmerica Names Wholesale Pro as CEO
BankAmerica, long a powerhouse in consumer banking, surprised the industry by reaching into its wholesale business for its next chief executive. David Coulter, one of eight vice chairmen, will succeed Richard A. Rosenberg as CEO on Jan. 1 and will immediately assume the title of president, the company said.
Continuing a Nebraska shopping spree, First Bank System agreed to acquire Firstier Financial for about $700 million in stock, or 1.9 times book value. The deal highlights a belief among analysts that the Midwest is becoming the next hot spot for bank mergers.
SunTrust Banks' flagship Trust Company of Georgia, best known for corporate banking and personal trust services, has formed a subsidiary to make small loans to credit-impaired consumers.
W. Brent Robinson, who ran the 159-branch network of American Savings Bank in California, resigned abruptly. The fourth-largest U.S. thrift said Mr. Robinson, on the job since 1987, had had a "serious disagreement" with top management.
In what is believed to be the first program of its kind in the country, Huntington National Bank is offering a no-interest, no-fee loan product to hospital patients looking to cover the unpaid costs of their health care.
Shorebank Facing Some Ironic Opposition
Shorebank, the renowned community development lender, is facing opposition in its own backyard as it bids to acquire the country's largest bank owned by blacks. Community leaders on Chicago's South Side, aiming to keep Indecorp in minority hands, filed formal protests with federal regulators week to block the acquisition.
Amid a flood of megamergers, community bankers are renewing their interest in the long-spurned concept of a merger of equals.
Grant County Bank of Ulysses, Kan., had a board of directors in the 1980s consisting primarily of aging local business leaders who generally rubber-stamped management recommendations. But insistent regulators and persistent competitors have forced a boardroom transformation.
A Mississippi judge drastically reduced the $38 million judgment against Trustmark over its force-placed insurance program. The judge erased $33 million of the $38 million in punitive damages a jury had awarded to two plaintiffs who bought an economy car with a loan from the bank.
Bank Credit Easier To Get than Ever
A new survey concludes small businesses are enjoying unprecedented access to bank credit, although those in the western part of the country have more trouble than those in other regions.
Wanted: Clearer Rules On Mortgage Disclosure
Industry representatives want the Federal Reserve Board to provide more guidance on Home Mortgage Disclosure Act compliance. A staff commentary proposed June 2 leaves too many questions unanswered, they said.
Atlanta-based Proactive Inc. started out selling its compliance software to small banks. Since bagging CoreStates Financial as a customer, though, it has set its sights on big game.
D'Amours Takes Flak From Trade Groups
Trade associations are accusing credit unions' top regulator of making statements to reporters that undermine the industry's safety and soundness.
Corporate credit unions in the Carolinas plan to merge in an effort to deal with increased competition and tough new regulations expected.
Ex-MasterCard Chief Is Named Advanta CEO
Advanta promoted former MasterCard chief executive Alex W. "Pete" Hart, above, to succeed Dennis Alter as chief executive. Mr. Alter, who had been Advanta's top officer for 24 years, will remain chairman.
MasterCard International has formed a global alliance with Verifone to encourage more merchants to install card-accepting terminals.
Wachovia, which made a name for itself a few years ago for competing on price alone, has unofficially thrown itself into the cobranding arena. The Atlanta-based issuer was one of the three finalists for the Delta Airlines cobranded card.
Chemical Banking's credit card customers keep some of the highest balances in the business - $2,000 - even though most of them are using a cobranded gasoline card.
Bank Funds Advance To 15% Market Share
Banks accelerated their drive into mutual funds in the second quarter. Assets under management grew to $354.1 billion, a 15% market share.
Those who think trust bankers have it easy should consider the cautionary tale of U.S. Trust's involvement in the bizarre Doris Duke case, which now includes allegations that the bank may have contributed to the untimely death of one of the late tobacco billionaire's pet camels.
Acquisitions and joint ventures in the money management industry climbed to a record 52 during the first half, including eight involving banks, a consultant says.
Deutsche Bank is betting that U.S. customers are ready to span the globe for stock picks. The German bank's New York-based subsidiary has applied to the SEC for permission create nine funds, each linked to a different country's stock market.
Bank of Boston Venture Bids for Prudential Unit
Just weeks after the collapse of a highly public round of merger talks and the ouster of its chairman, Bank of Boston was eyeing the purchase of a huge mortgage company. The bank's Jacksonville, Fla., mortgage subsidiary has formed a joint venture that is bidding for Prudential's home mortgage unit, sources said.
A key executive in the home loan industry says credit standards are steadily deteriorating. Michael K. Stamper, executive vice president of risk management at Freddie Mac, said that the three primary indicators of credit quality at Freddie Mac were all "going in the wrong direction."
Originations will fall 34% this year, according to a new study. That's $100 billion worse than any previous prediction.
Eight of nine regions in the country showed increases in home prices in the second quarter, according to figures compiled by Fannie Mae and Freddie Mac. Nationwide, prices climbed 2.7%.
First Interstate to Quit 5 Clearing House Groups
In the latest sign of how banking consolidation could change the structure of regional associations, First Interstate Bancorp has decided to drop its memberships in several automated clearing houses.
First Chicago/Mercantile Services, one of two financial agents slated to process electronic tax payments for the federal government, has licensed client/server hardware from Hewlett-Packard and software from Informix.
General Motors' plan to spin off its Electronic Data Systems subsidiary may position EDS to be acquired by a larger technology firm but is unlikely to have an immediate effect on banking clients.
Robert C. Meltzer has been named executive vice president and chief technology officer for Key Services Corp., a unit of Keycorp, Cleveland.
Comerica's first chief information officer, John Beran, who used to head an ATM network, aims to swing the big Detroit commercial bank to the consumer side.
Canary Wharf Saga May Come Full Circle
Banks finally may be on the verge of extricating themselves from one of the biggest bad loans of the international real estate bust.
Although pricing on the investment grade credit is expected to be thin, bankers are eager to participate in the Walt Disney Co. and Capital Cities/ABC deal, in part to get a leg up on offering other financial services to the huge company.
Boatmen's, Banc One, and a third company bid unsuccessfully for Nebraska's Firstier Financial, sources said. First Bank System won the bidding.
High-profile acquisitions by First Union and First Chicago and abortive talks involving Bank of Boston have helped send trading volume in bank stocks soaring.