"You're never too old to
become younger." - Mae West
In all the political hubbub of the past week, we almost overlooked the
fact that Popeye the Sailor Man turned 75 last Saturday. Those of us who
grew up watching Popeye cartoons delight in memories of his last-minute
rescues of his sweetheart, Olive Oyl, from the grips of the master
masher Brutus (sometimes called Bluto). He would send the hairy brute to
smithereens after downing a can of spinach to fuel his anchor-tattooed
forearms. "That's all I can stands, and I can't stands no more," he
would swear before taking action. Born in Chesterville, Ill., the
creation of cartoonist Elzie Segar, Popeye and his cartoon pals (Wimpy
and Olive Oyl) were modeled after real people in Chesterville. The
lovable old mariner starred in some 600 animated cartoons, now the
property of King Features Syndicate, Inc., which is planning a year-long
series of events to mark Popeye's 75th. "Well blow me down," he might
say, adding "I yam what I yam and that's all that I yam, I'm Popeye the
Sailor Man" (toot toot).
HOUSE SUBCOMMITTE WILL
DELVE INTO OCC's PREEMPTION DECISION
The Office of the Comptroller of the Currency's recently-issued rules
preempting many state laws for national banks and their subsidiaries and
restrict the authority of state agencies to examine or take action
against national banks will be the topic of the day on Wednesday, Jan.
28, when Rep. Sue Kelly (R-N.Y.). Kelly, who chairs the House Financial
Services Subcommittee on Oversight and Investigations, convenes a
hearing on the OCC plan. New York State Superintendent of Banks Diana L.
Taylor will testify on behalf of the Conference of State Bank
"This hearing will require the OCC to publicly justify its decision to
finalize these rules prior to congressional review," said Kelly.
Kelly, who is vice chairman of the House Financial Services Committee,
said she was disappointed that the rules were finalized without
congressional review. She said the hearings will give "all stakeholders
the opportunity to share their input on the new rules so that we can
ensure that this significant change to banking regulation does not
undermine protections for consumers."
CSBS President and CEO Neil Milner commended Vice Chairman Kelly for
acting so promptly to hold this hearing on the OCC rules, which CSBS
staunchly opposes. "This issue certainly deserves congressional
oversight," said Milner, who added that a single appointed regulator
should not be allowed to restructure and infringe on state regulators'
ability to protect consumers at the state level.
Rep. Kelly's press release announcing the hearing may be found here.
SPITZER LAWSUIT CHALLENGES
New York Attorney General Eliot Spitzer filed a lawsuit on Tuesday that
challenges the Office of the Comptroller of the Currency's new
preemption rules. Spitzer sued a subsidiary of a national bank for
illegally threatening to foreclose on a New York homeowner. The case
involves a 1974 mortgage loan issued by Mechanics Exchange Savings Bank.
The loan was assigned several times and has been held since 1995 by
First Horizon Home Loan Corporation, a Texas-based subsidiary of First
Tennessee Bank, a national bank. The consumer made all 300 payments by
automatic debit and mistakenly continued to pay the mortgage. The
customer was contacted in May 2003 and informed that due to a mistake in
1974, he should have paid $16 more per month, Spitzer said. The bank
extended the mortgage date and required additional payments and
threatened to foreclose when the customer refused to make additional
payments. Spitzer said his office had attempted to resolve the matter
with First Horizon, but bank "officials said they could not discuss the
matter because the OCC had issued a directive advising its officials not
to talk to state attorneys general." For more information about the
case, click here.
CSBS HITS THE ROAD TO
TESTIFY ON OCC PREEMPTION IMPACT ON STATES
Representatives of the Conference of State Bank Supervisors took part
this week in two state legislative hearings on predatory lending and the
impact of the Office of the Comptroller of the Currency's recently
announce federal preemption on the ability of state banking regulators
and attorneys general to protect citizens at the state level. The
Tennessee Senate Banking Committee and Commerce Committee held hearings,
with Tennessee Commissioner of Financial Institutions Kevin Lavender as
the key witness. CSBS Senior Vice President Montrice Yakimov and CSBS
General Counsel Buz Gorman also testified on behalf of CSBS. CSBS
President and CEO Neil Milner was in Helena, Mont., this week,
testifying on the same subject before the Montana legislature. Newspaper
coverage of the hearings in Tennessee may be found here.
PROPOSAL WOULD RAISE CRA
SMALL BANK THRESHOLD
More small banks would get relief from the compliance burden of the
Community Reinvestment Act under a joint proposal issued for comment
this week by the FDIC, Federal Reserve, OCC and OTS. The proposal would
define a small bank for CRA examination purposes as a bank with assets
of less than $500 million. Currently, small banks are defined as those
with less than $250 million in assets that are independent or affiliated
with a holding company that has total assets of less than $1 billion.
The proposal would make it clear that certain discriminatory, illegal or
abusive credit practices would count as factors against a bank in its
CRA evaluation. The proposal also would require CRA disclosure
statements to contain the number and amount of bank's small business and
small farm loans by census tract. Currently, such loans are disclosed in
the aggregate. The proposal is expected to be issued by the Federal
Reserve, the Office of Thrift Supervision and the Office of the
Comptroller of the Currency. Comments will be due within 60 days after
the proposal is published in the Federal Register, which is expected
shortly. For more information, click here.
FTC STUDY SAYS IDENTITY
THEFT TOP FRAUD
Identity theft continued to be the No. 1 fraud complaint received by the
Federal Trade Commission, the agency said on Thursday. Identity theft
was the subject of more than half a million complaints and represented
42 percent of all fraud complaints in 2003, up from 40 percent in
Other top categories of consumer fraud complaints in 2003 are as
- Internet Auctions - 15
- Shop-at-Home/Catalog Sales - 9 percent
- Internet Services and
Computer Complaints - 6 percent
- Prizes, Sweepstakes and Lotteries - 5 percent
- Foreign Money Offers - 4 percent
- Advance Fee Loans and Credit Protection - 4 percent
- Telephone Services - 3 percent
- Business Opportunities and Work-at-Home Plans - 2 percent
- Magazine Buyers Clubs - 1 percent
- Office Supplies and Services - 1 percent
FTC said the median loss for
victims of fraud was $228, while the median loss for victims of
Internet-related fraud was $195. The major metropolitan areas with the
highest per capita rates of consumer fraud were Washington, D.C.;
Seattle/Bellevue/Everett, Wash.; and San Diego. More
AROUND THE STATES
Missouri: State bank commissioner Eric McClure announced this week that
Dean McCracken has been named chief examiner. Dean is a long-time CSBS
instructor and serves on the Conference of State Bank Supervisors'
AROUND THE AGENCIES
FBI: The Federal Bureau of Investigation was able to obtain more than
2,000 financial institution fraud convictions in fiscal year 2003,
according to a report released on Tuesday. The FBI said its financial
institutions investigations resulted in $3.8 billion in restitution
orders and $35.6 million in fines. The FBI also seized $7.7 million in
assets, forfeited $3.5 million and posted recoveries of $15.1 million in
financial institution fraud matters. The agency noted that in recent
years external fraud schemes have replaced bank insider abuse as the
dominant financial institution crime. Between April 1, 1996, and Sept.
30, 2003, the FBI received 268,536 Suspicious Activity Reports for check
fraud, check kiting and counterfeit negotiable instruments, which
created losses of about $8 billion. The report also noted that criminal
activity is becoming more complex and loan frauds have expanded to
groups of people who are involved in the loan process.
banking regulators are seeking comments on how they can reduce the
regulatory burden on banks in the area of consumer protection rules. The
action by FDIC, the Federal Reserve, the Office of the Comptroller of
the Currency and the Office of Thrift Supervision is the second in a
series of requests for comments as part of the review under the Economic
Growth and Regulatory Paperwork Reduction Act. The agencies said they
wanted to know how consumer protection rules may be outdated,
unnecessary or unduly burdensome. The comment deadline is April 20. Read more...
FDIC: For a state-by-state look at conditions of banks and the economy,
pay a visit to the Federal Deposit Insurance Corporation's Web site. A
review of the state profile reports found that community banks in South
Carolina achieved solid growth as of June 30, 2003, although at a slower
pace than previous years. In Kentucky, banks experienced a moderate
decrease in profitability at mid-year with return on assets declining to
0.94 percent as of June 2003. The picture was mixed for the 179
institutions headquartered in Colorado. The report noted that larger
metro banks have been more successful in developing other sources of
non-interest income and have more actively realized securities gains
than small metro banks. In Missouri, FDIC noted a dramatic increase in
the use of borrowings, primarily Federal Home Loan Bank advances.
Between June 1998 and June 2003, the proportion of community
institutions with borrowings that made up at least 10 percent of total
funds increased from 9.6 percent to 19.4 percent. The profiles may be found here.
THE WEEK AHEAD
The House Financial Services Committee's Subcommittee on Oversight
and Investigations will hold a hearing entitled "Congressional Review of
OCC Preemption." New York State Superintendent of Banks Diana L.
Taylor will testify on behalf of CSBS. - 10 a.m., 2128 Rayburn
The Senate Banking Committee will hold a hearing entitled
"Understanding the (Mutual) Fund Industry from the Investor's
Perspective" - 10 a.m., 538 Dirksen Building.
CLOSING COMMENTS. . .
"Well, first of all, let me say this. I wanted to say to Governor Dean,
don't be hard on yourself about hooting and hollering. If I had spent
the money you did and got 18 percent, I'd still be in Iowa hooting and
hollering." - Quip from the Reverend Al Sharpton, referring to
former Vermont Governor Howard Dean's post-Iowa war cry. Rev. Sharpton's
comment came during Thursday night's Democratic Presidential Candidates' debate in New Hampshire.
Mary White, Editor
Teresa Dean, Contributing Writer