FINANCE: HALBERT LINDQUIST, an Arizona-based risk management consultant, says the chances of a fatal derivatives crash in U.S. banking are small but notes that the industry lacks sufficient expertise to evaluate and monitor complex securities. Back page FRANCIS SUOZZO, an S.G. Warburg & Co. analyst, cut his investment opinion on regional bank stocks, saying their prices may already have peaked for the year. He specifically cut PNC Bank Corp. to "hold" from "buy." Back page WASHINGTON: PROPONENTS of private deposit insurance are hoping the Republican push to shrink government will create a more favorable climate for their brainchild, which has languished in prior legislative sessions. Page 2 THE MOST POTENT legal weapon the insurance industry wields to keep banks off its turf appears headed for a historic review by the Supreme Court. The case may decide how many roadblocks states can erect to bank insurance sales. Page 3 REGIONAL BANKING: HIGHER RATES and a decline in consumer loan demand took their toll on First Virginia Banks, whose first-quarter earnings slipped 4%, to $27.2 million. Page 5 COMMUNITY BANKING: REPUBLIC SECURITY Bank, a $280 million-asset thrift in West Palm Beach, Fla., has applied to the state and to the Federal Reserve Bank of Atlanta to convert to a bank, which would complete its evolution out of the thrift fold. Page 6 CREDIT/DEBIT/ATMs: COMERICA will be the first bank company to use Electronic Data Systems Corp. as its procurement card processor. EDS said the new processing software would be fully operational next month. Page 8 THE LIMITED is seeking strategic financial and marketing partners for its credit card bank, World Financial Network National Bank, and has attracted interest from GE Capital, Beneficial Corp., and SPS Transaction Services, among others. Page 8 INVESTMENT PRODUCTS: BANKS AND THRIFTS have hit a wall in attempts to boost mutual fund market share, a study says, and probably won't do much better in the next five years. Page 10 MORTGAGES: GINNIE MAE volume plunged about 72% in the first quarter from the year- earlier period, to about $11.8 billion. But a newsletter compilation showed that some big lenders had significantly increased market share in the Government National Mortgage Association securities during the past 12 months. Page 13 COMPLAINTS of kickbacks by home lenders to real estate brokers are skyrocketing, according to the Department of Housing and Urban Development. But HUD is getting little of the cooperation it needs from state regulators to enforce the law. Page 13
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