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by Christopher WoodMIDWEST, Harris Nesbitt Corp., the Chicago investment and corporate banking arm of, Toronto's Bank of Montreal, has hired Douglas Lawson as the head of the, packaging investment banking practice in its commercial and industrial, group., Mr. Lawson, who has also been named a managing director, was the head of, the packaging practice in Piper Jaffray & Co.'s middle-market mergers and, acquisitions group in Chicago., Before that he had been a director in the fixed-income origination group, at ABN Amro Inc. and, earlier, the head of the global project and, infrastructure group at Duff & Phelps Credit Rating Agency, which Fitch, Inc., bought in 2000., He has 20 years of finance and investment banking experience., MIDDLE ATLANTIC, Bank of New York has promoted Margo Cook from senior to executive vice, president and put her in charge of equity and fixed-income strategies for, institutional market at its asset management business., Ms. Cook, a member of Bank of New York's investment policy committee, led institutional fixed-income management for BNY Asset Management for the, past nine years., That job has gone to Patrick K. Byrne, who was a senior portfolio manager, at BNY Asset Management. He reports to Ms. Cook., SOUTHEAST, Commerce Capital Markets Inc., a Philadelphia unit of Commerce Bancorp, Inc. of Cherry Hill, N.J., has hired Jane-Marie Baker as its Florida market, president for brokerage and wealth management., Ms. Baker, who will be based in West Palm Beach, joined Commerce from, Bank of America Corp., where she was a senior vice president and a regional, director in the brokerage and wealth management division. Before that she, held the same job at FleetBoston Financial Corp., which B of A bought in, 2004., Earlier she had been the Florida market president at Fleet. Still earlier, she had held a variety of jobs at Charles Schwab Corp., including group, vice, president, regional director, area vice president, and branch manager., WEST, American Mortgage Network Inc., a San Diego unit of Wachovia Corp., hired Charlotte I. Catalfo as its president and chief operating officer., Ms. Catalfo was the senior managing director of correspondent lending at, CitiMortgage Inc. of O'Fallon, Mo. Before that she had been the executive, vice president of production and production administration at Principal, Residential Mortgage Inc., which Citigroup Inc. bought in 2005 and merged, into CitiMortgage., She has 30 years of mortgage banking experience.
Published in American Banker (2006)
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by Damian PalettaRecords obtained under the Freedom of Information Act and an interview with, Alan Greenspan reveal the pivotal role the former Federal Reserve Board, chairman played in the debate over reforming regulation of Fannie Mae and, Freddie Mac, and how closely he coordinated with White House officials on, issue., The records, provided to American Banker in response to an October *2004-, FOIA request, reveal 450 meetings Mr. Greenspan hosted at the Fed with 319, people from September 2003 through August 2005., Mr. Greenspan met with foreign dignitaries, bankers, Wall Street, executives, and cabinet officials, but many visitors were key players in, fight over cracking down on the government-sponsored enterprises., GSEs are a very serious financial issue for this country, Mr. Greenspan, I would have been derelict had I not, Mr. Greenspan held frequent meetings with White House officials who, agreed with him that Congress should create a strong new regulator with, authority over Fannie and Freddie., For example, on April 4, *2005-, Mr. Greenspan hosted a meeting with Allan, Hubbard, director of the National Economic Council, and Kevin Warsh, then, special assistant to the President on economic policy., Two days later, Mr. Greenspan testified before the Senate Banking, Committee, urging lawmakers to cap the mortgage portfolios of Fannie and, Freddie. The next day Treasury Secretary John Snow largely embraced Mr., Greenspan's position, saying a new regulator should be required to limit, portfolios., Mr. Greenspan met several other times with White House officials on the, GSEs and other issues., Those meetings included nine with Stephen Friedman, Mr. Hubbard's, predecessor at the White House, and eight more with Mr. Hubbard., Mr. Greenspan met three times with Mr. Warsh, who was instrumental in, setting the administration's GSE policy. The Senate confirmed Mr. Warsh, last, Friday for a seat on the Fed's seven-member board of governors. He is, rumored, to be a candidate to succeed Roger Ferguson as vice chairman, Mr. Ferguson, announced his resignation Wednesday. (See story page 2.), This data indicates just how closely the Fed and the White House may, have been working together ... on an issue that is critical to both, said Tom Schlesinger, the executive director of the, Financial, Markets Center, an independent, nonprofit research center that monitors the, Fed from Howardsville, Va., A White House spokeswoman did not return calls seeking comment., Mr. Greenspan also met multiple times with the chief executives of Fannie, and Freddie., Richard Syron, Freddie's CEO, met with Mr. Greenspan seven times between, January *2004-, a month after Mr. Syron took the job, and March 2005 -- more, than any other nongovernment official., Asked about the meetings, Mr. Greenspan said Mr. Syron, who formerly was, the president of the Federal Reserve Bank of Boston, Still, several of Mr. Syron's meetings came before Mr. Greenspan, testified on Capitol Hill about GSE issues, including a meeting in January, February, and March of last year., In contrast, former Fannie CEO Franklin Raines met with Mr. Greenspan, only twice, and Daniel Mudd, who took the reins last year after Mr. Raines, was ousted, met with the central banker once in February 2005., Mr. Greenspan, who retired Jan. 31 after 18 years atop the Fed, said that, he met with the companies' executives at their request, and that they, attempted to convince him their portfolios did not pose a threat to the, U.S., economy., I did not get credible rebuttals to the analysis which I presented in, Mr. Greenspan said., Former Fed Governor Edward Gramlich, now the provost at the University of, Michigan, said the complex GSE issue often came up at the weekly or, biweekly, economic briefings that the Fed governors hold with staff on Monday, mornings., The Fed's interests in this are pure as the driven snow, Mr. Gramlich, Greenspan was, and we were, A spokesman for Fannie declined to comment for this story. A spokeswoman, are former colleagues and, have, She deferred to the Fed on, content of the meetings., There were other GSE-related meetings. Mr. Greenspan met with Armando, Falcon Jr. on May 9, *2005-, just days before he stepped down as director of, the Office of Federal Housing Enterprise Oversight. In an interview, Falcon, now a principal at Canonbury Group, said that he requested the, meeting to discuss broader housing issues, but that they also discussed, congressional efforts to reform the GSEs., The records are incomplete because the Fed would name only visitors who, checked in to meet with Mr. Greenspan. The records do not include visitors, who might have first met with another Fed official and then visited the, chairman. The records also do not list meetings Mr. Greenspan had, elsewhere,, such as on Capitol Hill or at the White House., Still, the records offer a rare window into the breadth of issues that, Mr. Greenspan faced on a daily basis in his role as central bank chief., For example, he met with lawmakers or Hill staff members on 31 occasions, including four meetings with Sen. Charles Hagel, R-Neb. Mr. Greenspan also, twice, in September 2003 and September *2004-, with National Security Adviser, Condoleezza Rice, now the secretary of state., Mr. Greenspan met three times with former Treasury Secretary Robert Rubin, after he had become the chairman of the executive committee at Citigroup, Inc., He met four times with James Thain, the chief executive officer of the New, York Stock Exchange. He also met once with Stan O'Neal, the chief executive, of Merrill Lynch & Co., More than 100 of the 450 meetings were with international officials or, diplomats, including Gordon Brown, the U.K. chancellor of the exchequer, (three meetings), and Kamil al-Gailani, the Iraqi minister of finance (one, meeting).
Published in American Banker (2006)
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by Tim MazzuccaHSBC Holdings PLC outlined plans to expand its U.S. commercial banking., The $1.5 trillion-asset London company said Tuesday that HSBC Bank USA, Inc., which is based in New York, plans to open a commercial banking office, in Chicago before July and is scouting a location in Houston, Over the last three years HSBC has focused on opening commercial bank, offices on the Atlantic and Pacific Coasts, Brendan McDonagh, the chief, operating officer of HSBC Bank USA, said during a conference call with, analysts focused on its commercial banking strategy. The unit will now work, toward filling in the gaps between the coasts and expanding in the South, said., Opening a commercial office, or offices, near Houston would help the unit, forge closer ties with the parent's Mexican commercial banking operations., We're trying to replicate our U.S.-Canada team in creating, The unit currently has offices in 11 U.S. cities, including Seattle and, Portland, Ore., on the West Coast and New York, Buffalo, and Washington on, the East Coast., Mr. McDonagh did not say where it would open offices after Chicago and, Houston, markets according to density and has 16 of those markets covered., HSBC Bank USA expects to hire 14 relationship managers in its current, Commercial markets that HSBC considers among the top 25 but does not, currently cover include Detroit, Atlanta, Minneapolis, St. Louis, Diego,, Meanwhile, HSBC is creating a China trading desk in New York for, corporate and middle-market customers of the commercial bank. The company, offers a similar service to its corporate investment banking and markets, customers, Mr. McDonagh said., Last year HSBC Bank USA generated 29%, or $443 million, of its pretax, income from commercial banking and 33%, or $509 million, from personal, financial services or retail banking., The unit did not outline any growth targets or say how much it plans to, spend on the expansion. However, executives said they will spend equally on, new and current markets., The unit has already been focusing on expanding its retail and private, banking operations, mostly through organic growth., On Tuesday, it provided an update on its three-year initiative to open, 140 retail bank branches., The company said it is about a third of the way through the initiative, launched last year, and has opened branches in New Jersey, Philadelphia, Washington., From a retail point of view, we are largely a New York state bank, McDonagh said. Of HSBC's 430 U.S. retail bank branches, 385 are in New, York,, and the company said it is focusing on reducing that concentration., Gerard Aquilina, the chief executive of HSBC Private Bank in the, Americas, told American Banker last week that he would not rule out, acquisitions here to boost the company's private banking, but he plans to, open private banking offices that would piggyback the company's retail, banking expansion., This month HSBC Private Bank hired Marlon Young from Citigroup Inc. to, work with Mr. Aquilina on the unit's strategy. Mr. Young headed private, client lending at Citi's Smith Barney, where he spent 27 years. He also led, the Northeast region for Citigroup Private Bank and headed investment, finance, for the Northeast and Middle Atlantic regions., He started his new job last week. HSBC said he was not available for an, interview.
Published in American Banker (2006)
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by H. Michael JaliliAmerican Express Co. has refined its approach to partnerships with, card-issuing banks after hiccups in its arrangement with MBNA Corp., a UBS, Securities LLC analyst said., After meeting this week with Gary Crittenden, Amex's chief financial, officer, Eric E. Wasserstrom wrote in a research note issued Wednesday that, indicated that there were some unexpected challenges that, In the meeting (which Amex confirmed took place), Mr. Crittenden, that the difficulty arose with MBNA's operational managers --, its top executives -- in implementing the coissuing program, the note said., into its, pitch to -- and integration efforts with -- newer bank partners, Wasserstrom wrote., The New York firm has learned to educate bank managers focused on the, return on receivables to think more in terms of Amex's orientation toward, spending rather than lending, the note said., For example, it now has an account plan for each partner that specifies, which of its partner's accounts it is targeting for conversion to an Amex, product and demonstrates how that conversion is yielding returns for the, These are tools it did not have when it signed, Because Amex has adjusted its methods, Mr. Wasserstrom wrote, it would, take longer to roll out products with new partners., MBNA, of Wilmington, Del., was Amex's first issuing partner in the United, States after the Supreme Court refused to hear an appeal of a 2004 court, decision throwing out the exclusionary rules of Visa U.S.A. and MasterCard, Inc., opt-out, to convert Visa or MasterCard-branded cards, Amex -- until cardholders complained about having to actively refuse the, cards., Amex said Mr. Crittenden was not available for an interview, but Michael, O'Neill, a spokesman for the company, said the CFO was referring to the, reorient some of, thinking toward spend-based customers as opposed to a typical borrowing, Amex is not rethinking its approach to global network services, What we're talking about simply is the process you go, through, was saying it's kind of a learning process you go through, He used MBNA as an example of, The partnership's success led to it being extended after Bank of America, Corp. bought MBNA this year, Mr. O'Neill said.
Published in American Banker (2006)
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by H. Michael JaliliDiscover Financial Services LLC has signed deals with four banks to issue, its credit and prepaid cards., The Riverwoods, Ill., unit of Morgan Stanley said Tuesday that it signed, up two credit card issuers: Alliance Data Services Corp., a Dallas issuer, private-label cards for retailers, and First Bank and Trust of Brookings, S.D. Discover also signed up two prepaid issuers: West Suburban Bancorp, Inc., of Lombard, Ill., and Palm Desert National Bank in California., First Bank and Trust, a unit of Fishback Financial Corp., caters to the, underbanked. Trent Sorbe, the president of Fishback's marketing unit, said, (Another Discover partnership, with Morgan Beaumont Inc. of Bradenton, Fla., which sells prepaid cards, was announced last week.), Leslie Beyer, a spokeswoman for Discover, said it has been pursuing, partnerships with issuing banks since October *2004-, when the Supreme Court, refused to hear an appeal of a court decision throwing out the exclusionary, rules of Visa U.S.A. and MasterCard International., Visa and MasterCard had barred banks from issuing cards with brands other, than theirs. Since the rules were lifted, Metris Cos. Inc. (now part of, HSBC, Holdings PLC), General Electric Co.'s GE Consumer Finance, and CompuCredit, Corp. have begun issuing Discover cards., GE issues them at Wal-Mart and Sam's Club stores., In December, Discover and Exante Bank of Salt Lake City said they would, pilot-test a health-care account debit card., Joe Hurley, Discover's vice president of network strategic development, said in a press release that the deals announced Tuesday exemplify his, Ms. Beyer said the deals had been reached at different times, but she, could not provide the timeframe by press time., In an e-mail, she wrote that last year's acquisition of Pulse EFT, Association has enabled Discover to enter the rapidly growing debit market., more than doubles Discover Financial Services' transaction volume, and number of cards in the U.S. marketplace, forming what we believe is a, solid platform for growth and providing us with a gateway to more than, 4,200, she wrote., Last year Discover reached an agreement that allows Discover network, cards to be accepted at China UnionPay automated teller machines and point, sale terminals in China. The deal also allows China UnionPay cards to be, accepted on the Pulse network in the United States.
Published in American Banker (2006)
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by Jody ShennEducational Loan Servicing LLC of Rockville, is set to announce, today that it plans to begin providing private-label origination, outsourcing, for the fast-growing private student lending market., To help get that business up and running by the fall, American, International Group Inc.'s United Guaranty Corp. has made an investment in, the servicer, which does business as Campus Partners., United Guaranty, which has not revealed the size of the investment, based in Greensboro, N.C. It is best known as a mortgage insurer but began, insuring private student loans in 2003., A widening gap in recent years between education costs and consumer, savings and federal aid has created explosive growth in private student, lending. Observers expect that growth to continue., We think with the growth in the marketplace ... there is clearly room, said Michael Carey, Campus Partners' president., He would not provide much detail on his company's origination-service, ambitions, except to say that, at least in the short term, it does not, expect, to get to be as big as First Marblehead Corp., the leader in the field., for outsourcing, platform,, N.C., where its servicing operations are based., The servicer began in 1964 as Wachovia Services, a division of Wachovia, Bank, and began servicing student loans the following year., For many years it was part of Academic Management Services Inc., which, was one of the top 20 originators of federal student loans when SLM Corp., (better known as Sallie Mae) acquired it in 2003., Regulations that prohibit schools from using a billing servicer and a, collection agency owned by the same company led Sallie to sell the, servicing, business to the privately held JPT Partners LLC, Campus Partners' current, parent, in early 2004., Campus Partners says about 500 clients use it to service about 600, loans that are not federally insured. According to a press release, scheduled, turnkey outsourcing solution for, including credit underwriting, insurance, loan, origination, funding, and loan servicing. It would work with lenders, marketing partners, and schools., Mr. Carey said it expects to securitize most of the assets and hold, residuals, but it would also offer to let clients acquire them., Its executive team includes a number of veterans of the student lending, business, Mr. Carey said. His brother, Paul Carey, the chief executive of, Campus Partners, is a former executive vice president at Sallie, where, Michael Carey worked for 17 years., During the 2004-05 school year the volume of private loans rose 32% from, a year earlier, to $13.8 billion, according to the College Board, a New, York, nonprofit that offers college admissions, guidance, assessment, financial, aid services. Such loans grew faster than any other form of student aid., In its annual report, First Marblehead said it was aware of two principal, competitors: Sallie and Servus Financial Corp., a company bought by Wells, Fargo & Co. in 2000 that does high-profile work as the disburser of, financing, for Microsoft Corp.'s training courses., First Marblehead's biggest clients are JPMorgan Chase & Co., Bank of, America Corp., PNC Financial Services Group Inc., and Royal Bank of, Scotland, Group PLC's Charter One Bank. During its fiscal third quarter, which ended, March 31, the Boston company facilitated the origination of $706 million of, private student loans available for securitization, or 45% more than it, did a, year earlier., Thomas K. Brown, the founder and chairman of Second Curve Capital LLC, has been a big proponent of the idea that banks and other lenders are, unlikely to develop on their own the skill set for originating private, student loans, even if they already make federal student loans., Last month in an article on his investment firm's Web site, Mr. Brown, touted a deal in which First Marblehead (which Second Curve Capital owns, shares of) will provide direct-to-consumer private student loans for, KeyCorp,, which generally provides private student loans in-house. The deal is more, evidence of the value the outsourcer provides to lenders, he wrote., Campus Partners' affiliation with United Guaranty, which has insurance in, force on about $4 billion of private student loans, would mirror First, Marblehead's partnership with the Education Resources Institute, nonprofit, guarantor of such loans., Alan Atkins, the president and group executive of United Guaranty's, domestic consumer group, said the insurer saw an opportunity to participate, one of the fastest-growing, consumer, as well as to augment its sales of such insurance., terms of outsourcing packaged with insurance, Mr. Atkins said. Existing, options involve relying on protection from guarantors that may not be as, United Guaranty carries double-A or equivalent ratings from all the major, rating agencies -- compared to Education Resources' counterparty rating of, Baa3 (the lowest investment grade rating) from Moody's Investors Service, Inc., and its A-plus insurer financial strength rating from Fitch Inc., Bill Davidson, the chief financial officer at the Education Resources, Institute, or TERI, in a brief interview pointed out its long history and, strong market share., As far as I'm concerned there is no competitive advantage from any, weakness TERI might have because TERI doesn't have any weakness, Education Finance Partners Inc., a San Francisco private student lender, that was founded in 2003 and has backing from Morgan Stanley, does all of, work in-house and does not offer its services to others., Tamera Briones, Education Finance Partners' CEO, said that over time she, created by the market's growth to lead to margin, compression that will eventually make it difficult to be in the business, without handling all parts of it., However, that inevitable maturing of the industry may be as many as 10, What I can assure you is, the marketplace we, Mr. Carey said he believes many originators will continue to lack the, scale to want to do the business on their own. He and Thomas Green, Campus, Partners' vice chairman, also own part of Student Trust Inc., a Washington, provider of federal consolidation loans., A spokesman for Campus Partners said Student Trust does not plan to use, his firm's new services to get into private student lending.
Published in American Banker (2006)
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