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July 3, 2008
“A real patriot is the fellow who gets a parking ticket and
rejoices that the system works.” -- Bill Vaughan
The Fourth of July gives us an opportunity to reflect on the idea of
patriotism. The topic is still high-profile and has been since
9/11, maybe since 1776. Flag lapel pins, ribbon car decals, bumper
stickers, flags, “Stars and Stripes Forever”…they all
remind us every day that we live in America, the land of the free and
the home of the brave. In our younger days, we never missed the Fourth
of July parade in our hometown (population 30,000). Decades later,
it’s still a tradition there, with politicians waving from vintage
convertibles and pretty girls atop floats built by schools and local
businesses. We remember when our big sister dressed up as Mae West to
ride a float sponsored by the bank where she worked. What Mae West has
to do with the Fourth of July we’ll never know, but it certainly
was memorable. Here in D.C., we probably won’t attend the parade,
but we will find some place to watch the fireworks from afar, basking in
our only summer holiday and all that it commemorates.
Senate Confirms Virginia Banker Betsy Duke For Federal
Reserve Board Post
Virginia banker Elizabeth (Betsy) Duke
received Senate confirmation last Friday to fill an open position on the
seven-member Federal Reserve Board of Governors. The 55-year-old senior
vice president and chief operating officer of TowneBank in Hampton
Roads, Va., will serve as a Federal Reserve
governor for a term ending in January 2012. Duke will be the only
current Board member with a background in commercial banking.
Duke is well-known in banking circles, having served as chairman of
the American Bankers Association in 2004-2005. She also served as
president of the Virginia Bankers Association in 1999 and served on the
board of the Federal Reserve Bank of Richmond from 1998 to 2000.
Before joining TowneBank in 2005, she served as executive vice
president of the merger project office at Wachovia Bank. Previously, she
served as executive vice president of community bank development of
SouthTrust Bank. Earlier in her career, Duke served as president &
chief executive officer of Bank of Tidewater, Virginia Beach, Va. , which she helped organize. She
received her bachelor's degree from the University of North
Carolina at Chapel Hill and her MBA from Old Dominion University. She is also a graduate
and former instructor of the Stonier Graduate School of Banking.
Neil Milner, president and CEO of the Conference of State Bank
Supervisors, commended the Senate on confirming Duke’s nomination.
“We are very pleased that Ms. Duke will be joining the Federal
Reserve Board. We know that she will bring a strong community banker
perspective to the board’s policy-making at a critical time for
the banking industry,” he said.
Banking By The Numbers; 72% Are State-Chartered
State-chartered banks continue to out-number their national and
federally-chartered brethren, according to first quarter statistics. The
agency’s Quarterly Banking Profile, released on May 29, showed
there were 6,122 state-chartered commercial and savings institutions as
of March 31, 2008, down from 6,190 at the same time last year.
There were 2,372 national banks and federal savings institutions,
compared to 2,459 on March 31, 2007. National banks and federal thrifts
continue to hold the lion’s share of assets, with a 71.8 percent
asset share while state-chartered financial institutions’ assets
stood at 28.2 percent.
Reflecting the current economic downturn, state commercial banks had
an average return on assets of 0.86 compared to 1.23 at the same time
last year. For national banks, ROA was 0.61 for national banks, compared
to 1.24 last year. State savings institutions had an ROA of 0.48,
compared to 0.73 as of March 31, 2007, while federal savings banks had
an ROA of -0.09, down significantly from last year’s 1.02. Total
number of employees (FTEs) at state chartered commercial banks and
savings associations as of March 31, 2008 stood at 733,706, down from
771,402 a year earlier. Net interest margin for state
chartered commercial banks as of March 31, 2008 averaged 3.45, down from
3.66 a year earlier. More detailed data on the nation’s banking system may be
queried from the FDIC State Banking Performance Summary at More Information
Around The States
Utah: To conserve
energy, Utah Governor Jon Huntsman recently announced that he will
extend state government service hours from 7 a.m. to 6 p.m., Monday
through Thursday, and close non-essential offices on Friday. The new
hours will begin the first week of August. Essential public services
that already run on extended hours and during the weekends will remain
open. "As we go forward with this initiative, we will conserve energy,
save money, improve our air quality, and enhance customer service,"
Huntsman said. The 'Working 4 Utah' initiative will be critically
evaluated after a one-year period to make any necessary adjustments. More
Information
Around The Agencies
FDIC/FRB/OCC: Federal banking regulators reminded financial
institutions that most of them face a July 30 deadline for their June 30
Call Reports. The joint notice by FDIC, the Federal Reserve and the
Office of the Comptroller of the Currency reminded the bankers of the
new reporting items that were previously optional, but are now
mandatory. In the call report for this quarter, banks must report
the number and amount currently outstanding of loans to small businesses
and small farms; the number of deposit accounts (other than retirement
deposit accounts) of $100,000 or less; and the number of retirement
deposit accounts of $250,000 or less. More
Information
FFIEC: The Federal Financial Institutions Examination Council
(FFIEC) this week announced the appointment of Paul Sanford as executive
secretary of the Council. He replaces Tamara Wiseman, who
returned to the Office of the Comptroller of the Currency.
Sanford
will be responsible for coordinating interagency staff task forces that
have been established by FFIEC and for directing the council’s
staff. Sanford comes to the post from
serving as a senior instructional designer for Educational Program
Development at OCC. Immediately prior to joining OCC, Sanford served
with FFIEC as a senior program administrator in the Education Office. He
also has served at FDIC as an examiner. Sanford holds a Bachelors degree in Business
Administration from the University of Massachusetts and a Masters of Science in
Finance from Boston College. FFIEC Chairman and
Federal Reserve Governor Randall S. Kroszner said, "Mr. Sanford's
background and experience in bank supervision and examiner education
make him particularly well-suited for the position." The Council,
established by the Financial Institutions Regulatory and Interest Rate
Control Act of 1978, is responsible for prescribing uniform principles
and standards for the federal examination of financial institutions and
making recommendations to promote uniformity in the supervision of those
financial institutions. Nebraska Director of Banking and Finance John
Munn represents state financial regulators on the Council.
NCUA: The National Credit Union Administration on Tuesday
liquidated two state-chartered California credit unions -- Sterlent
Credit Union of Pleasanton and Cal State 9 Credit Union of
Concord. Patelco Credit Union purchased assets and assumed most
shares of both institutions. At the time of liquidation, Sterlent Credit
Union had approximately $94.6 million in assets. Sterlent was
established in 1936 as EBTEL Federal Credit Union and became a
California state chartered credit
union in 2002. The Cal State 9 Credit Union liquidation and purchase and
assumption by Patelco Credit Union was announced May 22 and was
completed on July 1. Cal State 9 had been operating under NCUA
conservatorship since November 2007. Cal State 9 was originally
chartered to serve University of California employees. It had
assets of $339 million and served nearly 29,000 members. Patelco Credit
Union is a state-chartered, federally insured institution with $4.1
billion in assets serving more than 242,000 members primarily located in
California. Patelco has 39 branches
nationwide and 25,000 automated teller machine locations. More
Information
Upcoming Events
July 4 – Independence Day federal holiday. CSBS offices will be
closed.
July 8 – The FDIC hosts a forum on strategies for promoting
responsible and sustainable mortgage lending to low- and moderate-income
families. Speakers include: Treasury Secretary Henry M. Paulson Jr.,
Federal Reserve Chairman Ben S. Bernanke and JPMorgan Chase & Co.
Chairman and Chief Executive Officer James Dimon. – 7:50 a.m.
– 3:45 p.m., L. William
Seidman Center, Arlington, Va.
July 9 - The FDIC's Advisory Committee on Economic Inclusion
(ComE-IN) will convene to examine ways to encourage mortgage credit
availability to lower-income households. - 8:30 a.m. - 12 noon, 6th
Floor Board Room, FDIC headquarters, 550 Seventeenth Street NW,
Washington, D.C.
July 9 – The American Enterprise Institute will hold a
discussion on the future of insurance regulation. – 8:30 a.m.
– 4 p.m., AEI 12th Floor conference center,
1150 Seventeenth
Street, Washington,
D.C.
July 9 – Jeffrey Lacker, president of the Federal Reserve Bank
of Richmond, will be the luncheon speaker
at the National Economists Club. – 12 noon -1:30 p.m., Chinatown
Garden Restaurant, 618 H
Street NW, Washington,
D.C.
July 9 – The Securities and Exchange Commission will hold a
roundtable discussion on fair value accounting. 9 a.m. – 12:30
p.m., SEC's headquarters, 100 F Street NE, Washington, D.C. The roundtable discussions will
be available via webcast on the SEC Web
site.
July 10 – The House Financial Services Committee will hold the
first in a series of hearings on financial market regulatory
restructuring. Treasury Secretary Henry Paulson and Federal Reserve
Board Chairman Ben Bernanke have been invited to testify at the first
hearing. Subsequent hearings will be scheduled later in July and
continuing into the fall. – 10 a.m., 2128 Rayburn
House Office Building.
Closing Comment
“Like the Cyclops, the regulatory system would have only one
eye.” - Cam Fine, president and CEO of the Independent Bankers
Association of America, discussing the Treasury Department's Blueprint
for a Modernized Financial Regulatory Structure, quoted in the June 18
Credit Union Times.
CSBS EXAMINER
Mary White, Editor
Teresa Dean, Contributing Writer
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