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by Daniel WolfeBreaches, The Oregon Department of Revenue said an employee it dismissed for, perusing online porn at work caused the indecent exposure of over 1, Social Security numbers., One of the Web sites the employee allegedly visited put a Trojan virus on, his computer, which quietly sent taxpayers' names, addresses, and Social, Security numbers to criminals for more than four months, The Oregonian, reported Wednesday., The department said Tuesday that no tax records or credit card numbers, were stolen., The breach was discovered May 15, when the department was going through, the computer files of an employee it had fired for downloading pornography, work. A spokeswoman said it updates its list of blocked sites every 24, hours,, there are so many new sites, The department's employees are now prohibited from doing any personal Web, surfing at work., A woman who unknowingly bought a list of Social Security numbers and, other personal data at a city auction Saturday has demanded $300, 000 for, their return., Candace Carroll of Fairbanks, Alaska, paid $7.50 for an assortment of, unused office supplies -- which happened to include 460 index cards, detailing, the names, birthdates, Social Security numbers, and salaries of people who, worked for the city in the 1970s., Ms. Carroll called her demand for $300, 000 for returning the cards both a, finder's fee and punishment for the city for selling the information to, her,, the Fairbanks Daily News-Miner reported Wednesday., The city, which has refused to pay Ms. Carroll, plans to file a lawsuit, against her., If you think there have been a lot of data breaches lately, it's not your, imagination., The number of top 100 financial institutions that experienced an internal, breach in the past 12 months rose 35% from a year earlier, according to a, survey Deloitte Touche Tohmatsu of New York released Tuesday. The number, affected by a breach at a third party rose 26%., Viruses and worms were the biggest internal problem, causing 31% of such, breaches in this year's survey. Fraud from insiders was a close second, causing 28%., The report is based on responses from 31% of the top 100 global financial, institutions., Laws, Wisconsin legislators have refused to let microchip technology get under, their skin., A ban on the forced use of implanted identification chips took effect, Wednesday. Anyone who forces another person to have a microchip implanted, faces a fine of $10, 000 a day until the chip is removed, ComputerWorld, reported Monday., The law covers any kind of chip but is aimed primarily at radio frequency, ID tags. Similar laws have been proposed in 19 other states., Wisconsin legislators said that even though they were not aware of any, case where a chip has been implanted under duress, they wanted to head off, privacy issues. RFID chips broadcast information that can be intercepted by, people with portable readers., VeriChip Corp., the company that developed the implantable chips, said, that for medical reasons, it advises against making the implants mandatory., Some advice to data thieves: If you steal information about 4 million, people, don't give your own name to the company you ripped off., Akio Minomura and Akihiko Torii were arrested Tuesday after allegedly, making several phone calls and three visits to the offices of the Tokyo, telecommunications company KDDI Corp. as part of an extortion scheme, Jones reported., The two men had demanded up to $87, 000 in exchange for the data they, claimed to have on 4.5 million customers. (KDDI says 500, 000 of the names, were duplicates, so only 4 million customers were at risk.), The data included names, birthdates, gender, home addresses, e-mail, addresses, and phone numbers of people who signed up for KDDI's Dion, Internet, service before Dec. 18, 2003. KDDI says it has recovered all the data and, does, not plan to compensate any of the affected customers., Privacy, Children might want to be wary of new mobile phones they receive from, their parents -- they could be homing devices., Verizon Wireless, a joint venture of Verizon Communications Inc. and, Vodafone Group PLC, unveiled its Chaperone service this week, which enables, parents see the location of a child's phone on an online map at any time., enhanced version alerts parents when the phone strays too far from a, specified location, PC Magazine reported Monday., The service works with only one type of phone: a restricted-use one that, can dial only four numbers., The Verizon service resembles one Sprint Nextel Corp. introduced in April, that works with any phones on the same family-use calling plan. Neither, service allows a phone to be tracked without the consent of the calling, plan's owner., Disney Mobile, which runs on Sprint's network, will launch a similar, service next month., Authentication, A Department of Homeland Security building granted access to a visitor, using a forged version of an ID card that it is not supposed to accept, anyway., Bruce DeCell, a retired New York police officer and a board member of, 11 Families for a Secure America, used a bogus matricula consular card to, attend a scheduled meeting with DHS officials, CNN reported Monday. Mexican, consulates issue the cards, which can be used to open bank accounts, to enter government buildings., Mr. DeCell's group wants the government to crack down on illegal, immigrants, and has advocated for a ban on the use of matricula cards, which, it considers unsecure., A spokesman for the department said that it is working to prevent a, repeat of the incident, but that Mr. DeCell was not considered a threat, because he also had to go through a metal detector to enter the building., Smile! You're about to check e-mail., Consumers now can replace their home computer passwords with a handheld, face scanner that doubles as a Web cam, WiredNews.com reported Tuesday., The Snappy Face Recognizer from Widget UK Ltd. connects to computers, through a USB port., Security Watch is a weekly roundup of news and developments in data, security and their impact on financial services companies. E-mail comments, ideas, and suggestions to Daniel.Wolfe&lt, at&gt, SourceMedia.com.
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by Erick Bergquist and Jody ShennA subprime start-up is betting it can succeed where onetime market leader, Ameriquest Mortgage recently retreated: lending through retail branches, with, leads funneled from a central office., One reason is that Sage Credit Corp., which opened Jan. 1, has hired, When you own, your own company, you typically have an understanding of how a business, explained Quentin Caruana, the Irvine,, Calif.,, we see an opportunity to, pick, from the recent layoffs at other subprime lenders., Additionally, Sage thinks a smaller network than Ameriquest's (which had, 229 branches when it shut down its retail network this month) will help it, be nimble as it tries to originate $1.7 billion in loans this year, Caruana said., His recruitment pitch is that by joining Sage, brokers can essentially, exploit the uneven playing field between mortgage brokers and bankers in, five, major markets., California, Illinois, Georgia, New Jersey, and Nevada all require, mortgage brokers -- but not bankers -- to count the yield-spread premium, earned on loans when calculating whether total fees exceed a certain limit., This discourages brokers from making certain subprime loans, leaving the, field open to direct lenders., Another advantage to these salespeople of joining a centralized, corporation, Mr. Caruana said, is that corporate headquarters pays for, branch, advertising, especially in its five key states. Sending specific leads to, specific branches improves customer service, and does not bog things down, Mr. Caruana said, specialty within that branch office. We have specific branch offices with, it's really the character of the, individual branch manager that provides the difference between success and, failure. ... Because they were entrepreneurs they know how to manage an, Mr. Caruana added that Sage's management knew all 40 of the branch, on them., volume levels, their, compliance, Generally, Another distinction Mr. Caruana sought to make was between his offices, and net branches, in which branch managers get more autonomy than usual and, In most cases, net branches are looser in regards to licensing, corporate branch, Mr. Caruana said that Sage's loan files are of higher quality than those, filter a specific product type, to investors: a low loan-to-value ratio and a high, credit, and need to, take cash out of their home or refinance., the costs of, running a brick-and-mortar retail branch, but he says that the company, saves, money by avoiding the No. 1 cost in wholesale lending: the account, executive., hybrid model -- a middle ground between wholesale and, The lender sells its loans on a servicing-released basis to nonprime Wall, Street conduits including Credit Suisse, Deutsche Bank, Nomura, and Winter, Group (a New York outfit formed a couple of years ago by former Credit, Suisse, bankers)., Brown to Ivanhoe, Ivanhoe Mortgage, a division of Central Pacific Mortgage, announced in, mid-May that it has appointed Robert Brown to senior vice president of, retail, production., Mr. Brown is responsible for growing Ivanhoe Mortgage's retail production, channel on the East Coast., With more than 14 years of experience in the mortgage industry, Mr. Brown, recently served as a national recruiter for a net branch operation. He has, held several regional manager and regional vice president positions in the, industry. He also once owned a mortgage brokerage., Based in Orlando, Fla., with retail offices throughout the Eastern U.S., and a wholesale production platform that serves the East Coast, Ivanhoe, Mortgage is a full-service mortgage banking firm. Its parent, Central, Pacific, Mortgage, is based in Folsom, Calif., Warehouse Deal, NovaStar Capital Inc., the warehouse lending business of NovaStar, Financial Inc. said Tuesday that it has a deal to buy the warehouse lending, customer relationships of nBank in Commerce, Ga., NovaStar Capital, of Roswell, provides warehouse lines to mortgage, lenders nationwide., NovaStar Capital will acquire nBank's warehouse relationships with, approximately 40 mortgage lenders, who funded a total of approximately $1.8, billion in loans in the past year., In addition, NovaStar Capital will hire some of the key members of, nBank's warehouse lending team., NovaStar Capital's line limits generally run from $1 million to $15, million. It funds conventional, government, Alt-A, and nonprime loans, allows 100% of the line limit to fund nonprime and Alt-A loan types., Hot Seat, Fannie Mae's board seems to feel it has looked closely enough at what, president and chief executive Daniel H. Mudd did while other executives, were, allegedly manipulating its earnings numbers., However, a long list of other current executives mentioned in the Office, of Federal Housing Enterprise Oversight report released Tuesday will have, be looked at, according to its deal with the regulator., They are Robert Levin, the chief business officer, Michael J. Williams,, the chief operating officer, Peter Niculescu, the executive vice president, capital markets, Linda Knight, the executive vice president of capital, markets, and Julie St. John, an executive vice president and the chief, information officer., On a conference call Tuesday, Stephen Ashley, Fannie's chairman, said, make appropriate, after studying each executive's record. He gave no, timetable.
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by Steve GarmhausenRecent warnings that baby boomers are ill-prepared to fund their, retirement rang a chord with bank executives who oversee investment sales, advice., The predicament -- which is worsened by rising life expectancy --, presents them an opportunity to step in with advice and products, and they, are starting to figure out how to do it, said executives from Commerce, Bancshares Inc. in St. Louis, National City Corp. in Cleveland, Bank of, America Corp. in Charlotte, and Associated Banc-Corp in Green Bay, Wis., Half of U.S. workers have no retirement plan, and of the 40% that are in, defined contribution plans, the average account balance is just $29, report broadcast last week., from which, phone representatives advise callers on retirement account rollovers and, related issues. The advice is free, said Katherine Liebel, a senior vice, president in the company's retirement development group, because the bank, hopes to gather rollover assets., Final retirement rollover is one of people's largest financial, We've added a level of expertise to advise them on, Banks have long worked to educate their customers about preparing for, retirement, and St. Louis-based Commerce is now seeing a bigger appetite, information at its seminars, said Charles Kim, the executive vice president, of consumer banking., We're finding that there is a lot more interest in those than there used, It's not just retirees looking for social time and ideas, And bank retail investment sectors for several years have been moving, away from simply selling products toward a financial planning approach., Our challenge as advisers is to help clients avoid potholes or fill them, said Terence Condren, the director of, planning solutions at Bank of America., The North Carolina company uses rigorous analysis to give clients a, realistic picture of how much they will need to retire, problem,, several bankers agreed, is how to get customers to follow through on the, advice., how many people fail to take advantage of 401(k), availability, even when employers match their contributions, Mr. Kim said., Some new type of investment vehicle may be needed to make saving more, attractive, he added., Ms. Liebel noted that one product well suited to funding retirement --, The vast majority of people don't use, annuities for the best reason, which is to annuitize and create an income, to better, educate customers., Mr. Condren agreed that variable annuities -- essentially mutual funds in, an insurance wrapper -- are a potentially attractive way to protect one's, retirement savings., But they are not as simple as they could be, and it becomes very, bewildering for clients -- which is another reason to use an adviser, said., A broad problem is that many Americans, though they want guidance, dubious of financial advice from brokers, and do not want to pay for it, They need advice, and we, need, to be compensated for giving that advice, The St. Louis bank is studying different approaches to serving baby, I don't think we've figured out yet what the model, A Wisconsin executive voiced skepticism, however, about the extent of the, retirement readiness problem., will, said Curt Fuszard, the president and, chief executive officer of Associated Investment Services Inc., the retail, brokerage arm of Associated Banc-Corp in Green Bay., A challenge largely overlooked by the news media, is how, Americans can minimize estate taxes and husband their inheritances for, increasingly longer life spans., I've been in this business 26 years, and for almost all that time we, Associated helps its customers minimize inheritance taxes that can eat up, as much as 71% of a legacy -- trusts and insurance policies are among the, ways, to shelter an inheritance. It also helps them decide how aggressive their, investments must be to provide income adequate to their life expectancy, Mr. Garmhausen, who covered mutual funds for American Banker from 1997 to, 1999, is a freelance writer in Brooklyn, N.Y.
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by Katie Kuehner-HebertTwo southern California community banks that have wanted to expand but, could not afford meaningful acquisitions are merging as equals., The $480 million-asset National Mercantile Bancorp in Los Angeles and the, $481 million-asset FCB Bancorp in Camarillo announced the agreement, Thursday., The combination would create First California Financial Group Inc., C.G. Kum, FCB's president and chief executive, would have those titles at, First California, which is to be headquartered in Los Angeles., Kum said in an interview., We need to get to $1 billion in assets to obtain the necessary scale to, I'm not so sure that, either one of us would have been able to buy the other, and neither board, wanted to sell, so combining the two organizations was the perfect, First California would look to expand in the San Fernando Valley north of, Los Angeles, Los Angeles proper, and in Orange County, Mr. Kum said., In California, midsized banks are disappearing after being acquired by, larger institutions, and we wanted to take advantage of that void, said., Now we'll have the size and the currency necessary to become an acquirer, smaller institutions, and we'll also continue with our de novo branching, Scott Montgomery, National Mercantile's president and CEO, said, There's, an excellent potential that the new company could be $2 billion to $3, billion, in assets over the next three to five years, both through acquisitions and, National Mercantile's two bank subsidiaries, Mercantile National Bank and, South Bay Bank, have four branches between them. The branches are to be, merged, into FCB's First California Bank, which is in Camarillo. The bank would, then, have 12 branches, from Ventura north of Los Angeles, south to Orange, County., Mr. Montgomery, who plans to retire after the deal closes, said that no, money would change hands and that shareholders would receive stock in First, California. FCB shareholders would receive 1.79 shares for each share owned, and National Mercantile shareholders one share for each owned., The merger is expected to be completed in the fourth quarter. Current, National Mercantile shareholders would own about 50.5% of the shares in the, new company and current FCB shareholders about 49.5%., First California's board would have five directors from National, Mercantile and five from FCB. Robert E. Gipson, National Mercantile's, chairman, would be the new company's chairman and FSB chairman John W., Birchfield its vice chairman., FCB's stock soared on news of the deal. In late trading it was up 14.2%, from Wednesday's close, to $22.90. National Mercantile's stock was down, 7.4%,, to $13.75.
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by Jody ShennCharterMac, the New York multifamily finance specialist, has agreed to, buy the Dallas high-yield commercial real estate debt specialist ARCap, Investors LLC., The publicly traded CharterMac already owns 10.7% of the privately held, ARCap, which has about 100 employees and manages more than $2.8 billion of, commercial mortgage securities for itself and institutional clients., The deal was announced Thursday, is expected to close in the third, quarter, and still needs approval by ARCap's other shareholders. It values, ARCap at $284.5 million., In a press release, Marc D. Schnitzer, CharterMac's chief executive, said, the transformation of our company from a, In 2003 CharterMac bought Related Capital Co., which also focused on, multifamily finance, particularly affordable housing, for $338 million., Last, year, its $84 million acquisition of Capri Capital Finance gave CharterMac, 49% interest in the commercial mortgage bank's pension-fund advisory arm., Buying ARCap would add debt and equity investments in retail, industrial, office properties to the types of assets CharterMac manages., CharterMac plans to make a cash payment of $210.3 million to ARCap's, third-party owners. It would also swap convertible common share equivalent, securities worth $5 million for a 2.1% stake held by ARCap's management, $39.1 million in cash to retire ARCap's deferred compensation plans, transaction fees and expenses of $4.3 million. It would also issue to ARCap, employees $31.6 million of restricted common shares., To finance the deal, CharterMac plans to take out a $350 million, six-year term loan and a $150 million revolving credit facility from UBS, Securities LLC and Bank of America Corp., ARCap is to become a unit of CharterMac and keep its name. ARCap's, management, including chairman and CEO Leonard W. Cotton and president J., Larry Duggins, would continue to oversee day-to-day operations. Mr. Cotton, would become CharterMac's vice chairman and Mr. Duggins would become, ARCap's, CEO., CharterMac said that the acquisition probably would not affect cash, available for distribution per share this year but that it would probably, boost it in 2007., UBS Securities acted as financial adviser to CharterMac and Paul, Hastings, Janofsky & Walker LLP acted as legal counsel. Bear Stearns & Co., Inc. was the financial adviser to ARCap and Orrick, Herrington & Sutcliffe, LLP was its legal counsel.
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by Cheryl Winokur MunkConvinced that variable annuity growth is being stymied by high costs, Raymond James Financial Inc. says it will cut its commissions to address, problem., Starting in August, the St. Petersburg, Fla., brokerage company will, charge lower commissions on variable annuity sales and pass on the savings, customers, an executive said. In addition, it is simplifying its, product offerings and adopting a commission structure that will not change, regardless of the annuity features clients choose., Scott Stolz, the president of Raymond James' insurance and annuity, general agency, said the company calculates that investors will save at, least, 0.25% a year on fees., We believe it is important for the industry overall to begin to bring, We're just trying to, Indeed, other distributors are considering adopting similar tactics, said Kenneth Kehrer, the, president of Kenneth Kehrer Associates, a Princeton, N.J., consulting firm, that tracks annuity sales through banks., If some companies are selling what they're positioning as a more, you'd, expect business to go in that direction. Just like when Japanese cars came, America, they changed everything because people started buying them, instead of, Mr. Stolz said industrywide variable annuity sales through all channels, have been stuck at around $130 billion annually for several years, prompting, his company's changes to achieve growth at a higher rate. What's more, said, Raymond James believes commissions should be more in line with those, for mutual fund sales in order to discourage advisers from pushing one, product over another just because of the higher payout., Leading a cut in variable annuity commissions has its drawbacks, however., The company expects to see at least a 15% to 20% revenue decline and also a, drop in sales as financial advisers get used to the changes, Mr. Stolz, said., The brokerage could also lose some advisers who are unhappy with the, lower commissions. About two-thirds of the company's roughly 4, 800 advisers, sell annuities, and those who do most of their business in this area stand, be hurt the most -- at least temporarily., But our belief is, over, the long term, bringing the commissions down will make the products more, acceptable and easier to sell and that, while they're getting paid less on, each sale, Raymond James is the fifth-largest third-party seller of variable, annuities through banks. Last year, it sold $596 million, ranking behind, Independent Financial Marketing Group, with $1.8 billion, LPL Financial,, $975, million, PrimeVest, $671 million, and Fimco, $640 million, Mr. Kehrer said., As for the impact on insurance companies, Deborah Tucker, a vice, president of the National Association for Variable Annuities, an industry, trade group, said she does not think it will be an issue because carriers, have shown in the past that they are willing to develop product features at, the request of their most valued distribution partners., Indeed, Mr. Stolz said 18 insurance companies -- including Hartford, John, Hancock, MetLife Inc., Lincoln National Corp., and AIG SunAmerica Inc. --, agreed to meet his company's new requirements. Two providers the company, worked with in the past declined to change, because Raymond James, not a big enough distribution partner for them., Ms. Munk, a former American Banker investment and insurance products, reporter, is a freelance writer in West Orange, N.J.
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by David BreitkopfA big contract with Bank of America Corp. helped boost revenue and, profits at the point of sale terminal maker VeriFone Holdings Inc., The San Jose company said net income climbed 71% from a year earlier, $15 million, in its second fiscal quarter, which ended April 30. Revenue, jumped 21%, to $142.2 million., Chairman and chief executive Doug Bergeron said that U.S. and foreign, sales have been strong, especially through its deal with B of A, one of the, top merchant processors., We are seeing great momentum at Bank of America as they continue their, replacement of legacy competitive systems with VeriFone systems, Monday afternoon on a conference call with analysts., Sales in Canada have been strong because its banking industry is shifting, from magnetic stripe cards and terminals to the Europay, MasterCard, Visa, We plan to build on this momentum as, our Canadian customers prepare for the approaching 2010 EMV deadline, said., Revenue from Canada tripled during the quarter, and Mr. Bergeron said the, company now has about 20% of the Canadian market. Ingenico Group of France, the market leader., mostly because of the rapid deployment of terminals in Mexico. VeriFone, also, won a contract with the Mexican government during the quarter to deploy, some, of the infrastructure to transmit voting results in national elections., In the Asia-Pacific region, revenue grew 24% because of deals in India, and China. In India the company shipped the remaining 20, 000 terminals of a, 000 unit order with ICICI Bank. VeriFone won two contracts in China, with, Bank of China and the Bank of Communications., Mr. Bergeron said Verifone has benefited from the rapid adoption of, The main point when you, think, about Eastern Europe, Latin America, and Asia is the consumer economy is, There is almost an emancipation, if you will,, of consumers in these newly democratized or newly economically vibrant, Also in the quarter, VeriFone announced that it was buying a rival, Lipman Electronic Engineering Ltd. of Israel, for $793 million. The deal is, expected to close at the end of October, and Mr. Bergeron said he expects, to increase earnings by 12 cents per share in fiscal 2007. Excluding the, Lipman deal, VeriFone said, fiscal 2007 should be up about 20%., Andrew W. Jeffrey, an analyst for SunTrust Robinson Humphrey, said, VeriFone's continued expansion of its gross margin is the most important, measure of its fiscal health. Verifone said that margins widened to 44.6%, from 40.2% a year earlier., demonstrates the company's pricing power, the relative, superiority of its solutions and its impressive supply chain efficiency, VeriFone continues enjoying the, highest gross margin in the POS terminal industry, and management expects, One of the only weak points for the company was sales to the fast-food, industry. Mr. Bergeron did not give specific numbers but said they were in, because the company has completed deals with many of the, major companies and is now pursuing sales to franchise owners, Robert J. Dodd, an analyst for Regions Financial Corp.'s Morgan Keegan &, Co. Inc., said Verifone's sales last year to the fast-food industry came, corporate deployments, which tend to happen rapidly., Now it's franchise deployments, which don't happen as fast
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by Paul Davis, Jim Cole, and Tim MazzuccaLet Him Speak, Mike Mayo is known for putting chief executives in the hot seat on his, periodic conference calls, but on Wednesday he modified his style when he, hosted a call with Ken Thompson, the head of Wachovia Corp., Granted, the Prudential Equity Group LLC analyst did not shy away from, asking Mr. Thompson to address Wall Street concerns about his $25.5 billion, deal to buy the Oakland thrift company Golden West Financial Corp. But he, seemed content to let Mr. Thompson address the issues uninterrupted., He mostly turned the floor over to some Prudential clients. Several, expressed skepticism over the Charlotte company's decision to buy a large, thrift company., At times the exchanges created sparks, one client questioned Mr., and then, off the executive in midsentence., Mr. Mayo has hosted calls with several CEOs in recent weeks, including, James Dimon of JPMorgan Chase & Co. and Ken Lewis of Bank of America Corp., Meanwhile, it seems that despite Wachovia's other news this week, Lewis' company is still top dog in Charlotte, at least in the architectural, sphere., Wachovia disclosed renderings for a 46-story tower it plans to build in, downtown Charlotte, where both Wachovia and B of A are headquartered. The, building would be 14 stories shorter than B of A's headquarters and four, shorter than Wachovia's own head office., The tower, part of a proposed arts complex, is scheduled to be completed, 2009 and would house a new trading floor, Wachovia said., A Wachovia spokesman said Thursday that the company would occupy roughly, half of the tower's 1.4 million square feet. One rendering depicts the, tower, as an angular, blue-tinted glass building., Don't Push It, Every time a discount broker slashes trading fees, people wonder how low, they can go., But Chris Dodds, the chief financial officer of Charles Schwab Corp., says even he has his limits., The San Francisco brokerage plans to lower its maximum online trading fee, to $12.95 and eliminate several other trading and banking fees by July 1, as it, continues to address customer demand for better value., Lest anyone get the wrong idea, though, Mr. Dodds said, That doesn't, mean that a client can come to us and say, 'I want everything to be free, you guys figure out how to make money.' You know, we'll draw the line, The latest bid to reconnect with investors should have been no surprise, to anyone who listened to the Q&A session at the Schwab's annual meeting, keep things moving and, he and chairman and CEO Chuck Schwab, were, hit with just one question., As he waited in vain for a second question, Mr. Dodds quipped, We must, Mr. Schwab, who had talked earlier at the meeting about the success of, I think they just want a little bit more of the, Charter One Collects, Royal Bank of Scotland Group PLC's Charter One Bank in Chicago plans to, raise money for area nonprofits at a series of rock concerts scheduled to, take place at the year-old Charter One Pavilion at Northerly Island this, summer., On Saturday the company will collect money outside the show featuring Rob, Thomas and Jewel, that will kick off what it calls Charter One's Making, Music, Matter. The proceeds will go to the Greater Chicago Food Depository., This is something that we're looking to help the community with, said, We're not looking to gain, visibility with this, we're not going to open checking accounts or anything, Charter One will also be looking for donations June 24 at a Black Crowes, concert and a day later at a show featuring Mark Knopfler with Emmylou, Harris. The Greater Chicago Food Depository will also be the beneficiary of, those collections., The proceeds from next month's collections will go to Meals on Wheels., Ms. Reineking said Charter One is still finalizing an August beneficiary., The company will match up to $25, 000 of contributions for each nonprofit
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by Joe AdlerThe Federal Deposit Insurance Corp. is set Tuesday to show how it plans to, distribute rebates back to banks if the agency's fund grows too large., The issue could be critical for the financial services industry once the, agency begins charging all banks premiums again and the ratio of reserves, insured deposits starts to grow, but it has remained a relatively low, priority while the FDIC makes other changes mandated by a recent reform, law., Under the legislation enacted in February, the FDIC must give back half, of its assessment income once the Deposit Insurance Fund's reserve ratio is, above 1.35%, and all of its income if it reaches 1.5%. With the fund at, 1.26%, at the end of *2005-, reaching such a level is probably years away, observers, said., But Robert Davis, an executive vice president at America's Community, Bankers, noted that the FDIC has been prevented from charging premiums on, most banks since *1996-, and the new law gives it more flexibility to charge, assessments. Once the agency implements a new risk-based premium system, later, this year, the fund could start to grow quickly., If you start assessing all banks all the time ... you're going to have a, The fund may hit the 1.35% mark if insured deposit growth slows, but is, unlikely to hit 1.5% anytime soon, said Rob Strand, a senior economist with, the American Bankers Association., Given that the FDIC would have to give half back at 1.35%, it would take, assessment income for the fund to get to 1.5%, Mr., Strand, Rebates are separate from a credit that the FDIC must provide, institutions, a topic the agency is also expected to discuss on Tuesday., reform law said the FDIC must provide a one-time credit -- to be used to, offset future assessments -- to all banks that paid into the deposit, insurance funds before 1996. Though the law outlined specifics for how the, FDIC was to distribute the credit, it gave the agency a freer hand with, rebates., It said the FDIC must consider several factors when distributing rebates, including an institution's portion of the assessment base on Dec. 31, *1996-, the last time significant premiums were assessed -- and its total premiums, paid after Jan. 1, 1997., But it left unclear which of those factors is more important. Some, industry representatives argued the FDIC should continue to give preference, to institutions that paid premiums before 1996 and recapitalized the bank, thrift funds., We would be surprised if there wasn't a differential weighting, Davis said., The agency must also consider the amount of assessments paid by an, institution because it poses a higher risk to the deposit insurance fund to, ensure that riskier banks do not receive a larger share of any dividend., said Ike Jones, a vice president, They're not, going to, The agency is even allowed to, suspend or limit the rebate under certain conditions, including a, heightened, risk of loss to the deposit insurance fund.
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