Stand by Your Bank
Call it the duel of the politicians.
In their competing bids to claim Wachovia Corp., both Charlotte, N.C.-based First Union Corp. and Atlanta-based SunTrust Banks Inc. appear to have enlisted the help of hometown legislators in their war.
Last week, North Carolina Rep. Mel Watt was one of several lawmakers who fired off a letter to the Federal Reserve Board stating that all the companies' Community Reinvestment Act records should be taken into account as part of the review of their merger applications. Rep. Watt, for his part, strongly implied in an interview that SunTrust was not up to speed.
"It is especially important since at least one of these banks has not had a stellar performance on CRA," said Rep. Watt, an apparent reference to SunTrust's "low satisfactory" grade on the lending-test portion of its CRA score.
Meanwhile, Georgia state Sen. Vincent D. Fort opened a kind of ground war against First Union, holding demonstrations Thursday outside of its offices in Atlanta and accusing the company of engaging in predatory lending.
"We think that federal regulators should not approve the merger between First Union and Wachovia until First Union makes right the 500,000 predatory loans that they have" from Money Store, Sen. Fort said in an interview.
A Practiced Tongue
A county prosecutor and judge turned member of Congress, Rep. Stephanie Tubbs Jones used her cross-examination skills on Federal Reserve Board Chairman Alan Greenspan last week when the maestro testified before the House Financial Services Committee.
The Ohio Democrat first questioned Mr. Greenspan about his opposition to raising the minimum wage. "If you don't raise the minimum wage and you wait on rising levels of productivity, what do the people who are making less than minimum wage, with no health care, paying high gas prices, $2 for a loaf of bread, $3 for a gallon of milk, do in the interim?" Rep. Jones asked.
Mr. Greenspan chose the Socratic method to answer. "Let me ask you this: If you raise the minimum wage and they lose their job as a consequence, does that help them?"
Rep. Jones was not impressed. "Don't ask me a question," she said. "You answer my question."
Later, she pounced on Mr. Greenspan after he said that he was "strongly supportive" of actions to eliminate predatory lending and that it is "distressing" but added that "it's a small issue, relatively speaking."
Rep. Jones asked: "It's a small issue?"
Mr. Greenspan was quick to defend himself. "No, I'm trying to say when you look in terms of 8,000 banks and a lot of other institutions, it's a small issue in the sense that subprime lending is a large part of the market and subprime lending, I think, helps minorities; it's a very important part of our financial system," he said. "I think it is a big problem for particular groups of individuals, and the reason why the issue has difficulty moving forward is, it's not a big enough issue in the total financial system to get the type of support that you need to eradicate this particular practice."
Is there something in the water at Wall Street giant Goldman Sachs that causes employees to aspire to political office?
First Robert E. Rubin gave up his co-chairmanship of what was then a partnership to join the Clinton administration, ultimately becoming Treasury secretary, then John Corzine decided he had been chief executive officer long enough and ran successfully for the Senate from New Jersey last year.
Now it appears Goldman may spawn yet another politician, this time on the GOP side.
Roll Call, a Capitol Hill newspaper, is reporting that former partner Jack Ryan is mulling a Senate bid.
The Chicago-based Mr. Ryan, no relation of Illinois Gov. George Ryan, left the firm last year to become a teacher at the inner-city Hales Franciscan High School, a private school for black males.
Mr. Ryan, 41, has never held public office, but armed with some serious cash reaped during his Goldman tenure he could possibly give Democratic Sen. Richard J. Durbin a run for his, uh, money. But first, he would have to decide to run and then get past at least one announced candidate seeking the GOP nod.
Attempts to reach Mr. Ryan were unsuccessful.
Mark C. Brickell ends 25 years with J.P. Morgan Chase & Co. and its predecessors today to become chief executive officer of Blackbird Holdings Inc., an e-commerce company founded five years ago to spur electronic trading of interest rate swaps.
Though Blackbird is based in Charlotte, N.C., Mr. Brickell will remain in New York. He said his knowledge of the infrastructure within which swaps are traded should help Blackbird reach its goals. Online trading has been hampered by the fact that swaps are customized deals in which a party's exposure continues after the transaction is completed. "Those challenges among others have people still doing the business over the telephone and fax lines," he said. But repeatedly entering data leads to mistakes that could be avoided online. "We'll have one digital record of the deal, and my record will match your record," Mr. Brickell said. "It would also lower the cost of doing deals."
Asked about leaving Morgan Chase, Mr. Brickell said, "Of course, it's hard to leave such a great institution, but this seems like a great opportunity."