|"A fool and his money are
soon invited everywhere." - Warren Buffett|
We must confess: Unlike most of America, we've never bought a thing on
eBay. It's not that we wouldn't, but the old phrase caveat emptor keeps
coming to mind. This week, we were hoping to win the PowerBall lottery
so that we could bid on lunch with Omaha billionaire Warren Buffett. The
lunch went for $250,000. Described as the world's largest online flea
market, eBay has certainly taken the buying public by storm. We had to
chuckle, however, when we read that one man is trying to sell "nothing"
on e-Bay. He says that people will buy anything on e-Bay, so he wanted
to see if someone would buy nothing. Yesterday, a tooth once belonging
to Elvis Presley was put up for bid. But it comes with a lock of his
hair and a gold-plated copy of "Love Me Tender" and requires a minimum
bid of $100,000. We did a quick search to see what other strange things
have been sold on eBay, and we found that someone bought a jet for a
mere $4.9 million, and a missile silo sold for $2.1 million. A 7-inch
French fry sold for $200, and the Oskaloosa, Iowa post office sold for
$241,000. A while back, a British man put his wife up for sale, but
withdrew the offer shortly thereafter. Surprise, surprise. Lunch with
Warren Buffett would be interesting, for sure. But since we lost out on
that one, we'll just wait for Jimmy Buffett to offer a cheeseburger in
paradise -- with him, of course. Now you're talking, eBay!
REGULATORY RELIEF BILL PASSES JUDICIARY COMMITTEE REVIEW
The House Judiciary Committee passed regulatory relief legislation by
voice vote on July 9. The Financial Services Regulatory Relief Act (H.R.
1375) was passed by the House Financial Services Committee on May 20.
The legislation, sponsored by Rep. Shelley Moore Capito (R-W.Va.), would
streamline regulatory compliance to counterbalance additional
requirements placed on banks by the USA Patriot Act. Some of the
provisions in the bill would allow regulators to adjust the exam
schedule of healthy institutions, modernize regulators' recordkeeping
requirements, give banks more flexibility in paying dividends and
streamline the merger application process.
The bill also includes a CSBS-supported provision to allow states
hosting a branch of an out-of-state bank to examine the branch but not
charge fees for the examination.
WHITE HOUSE ANNOUNCES TREASURY NOMINEES
The White House announced on Wednesday that it will nominate Susan C.
Schwab as Treasury Deputy Secretary and Kenneth H. M. Leet as Treasury
Under Secretary for Domestic Finance. Leet will replace Peter Fisher,
who submitted his resignation to President Bush on July 9 and will leave
in October. Treasury Secretary John W. Snow praised Fisher's
performance, saying his expertise in financial markets had been
invaluable in the aftermath of the Sept. 11 terrorist attacks and in the
management of the nation's debt during shifting economic times.
Leet is the managing director of the Investment Banking Division at
the Goldman Sachs Group, Inc. Earlier in his career Leet was a principal
at Odyssey Partners and served as a lending officer at Manufacturers
Hanover Trust. He has a bachelor's degree from Brown University and
M.B.A from Harvard Graduate School of Business.
Schwab will replace Kenneth Dam who left in February. Schwab is dean at
the school of public affairs at the University of Maryland. Previously,
she served as the director of corporate business development at Motorola
Inc. and as an assistant secretary at the Commerce Department. Schwab
has a bachelor's degree from Williams College, a master's degree from
Stanford University and a Ph.D. in from George Washington
More information about the nominees may be found in Treasury's press release.
SUPREME COURT ACCEPTS CREDIT CARD CASE
The U.S. Supreme Court has agreed to hear a credit card case during its
fall term. The case, Pfennig vs. Household Credit Services, Inc.,
involved a lawsuit brought by a credit card customer who alleged that a
fee for providing credit over her credit card's limit was not properly
disclosed as a finance charge under the Truth in Lending Act. The
Federal Reserve's Regulation Z excludes fees for exceeding a credit
limit from the definition of finance charge, and a lower court had
dismissed the lawsuit. However, the U.S. Court of Appeals for the 6th
Circuit ruled that the over-limit fee "falls squarely within the
statutory definition of a finance charge" and therefore was not open to
interpretation by the Federal Reserve. The court said that the bank
knowingly allowed its customer to exceed her credit limit and charged a
fee, which was "by definition a finance charge." However, the 6th
Circuit said the bank was entitled to immunity from civil liability
because it had followed Regulation Z. For more information, click here.
AROUND THE STATES
California: A new state law in California aimed at curbing identity
theft went into effect on July 1. The law requires companies that
maintain electronic databases and do business in the state to alert
customers whenever "unencrypted personal information was or is
reasonably believed to have been acquired by an unauthorized person."
The law gives California consumers broader power to sue for failure to
provide such alerts.
Georgia: Georgia Commissioner of Banking and Finance David G. Sorrell
announced three staff appointments this week, as follows: George A.
Reynolds, Senior Deputy Commissioner; Grace Lurry, Deputy Commissioner
for Supervision; and Robert M. Braswell, Deputy Commissioner for
Washington: The Washington State Department of Financial Institutions
will hold public meetings during July at eight locations in Washington
to inform owners and operators of businesses commonly known as "money
transmitters" and "currency exchangers" about a new law taking effect
later this year. The Uniform Money Services Act requires all companies
offering money transmitter or currency exchange services to be licensed
and examined by the DFI. The meetings are being conducted by DFI to
allow a public review of rules drafted by the agency to implement the
new law. Meetings will be held in Tumwater, Seattle, Yakima, Pasco,
Spokane, Wenatchee, Mount Vernon, and Tacoma.
Correction: In last week's CSBS Examiner, we reported on the recent CSBS
reaccredidation of the Pennsylvania Department of Banking. A William
Schenck III is Pennsylvania's Secretary of Banking, not William S.
Schenck, as stated in the article. We apologize for this mistake.
CRAIG HERROLD TO SERVE AS CSBS SERT CHAIRMAN
CSBS named a new State Examiner Review Team (SERT) chair. Craig Herrold,
Director of Examination, Supervision & Enforcement with the
Pennsylvania Department of Banking, was appointed chair by CSBS
Technology Committee Chairman David G. Sorrell, Georgia Commissioner of
Banking and Finance. As SERT chair, Herrold will represent the state
banking departments on an interagency Applied Technology Group. He has
been with the Pennsylvania Department for 12 years, and currently serves
as Director of Examination, Supervision and Enforcement. The outgoing
chair, Harold Carney with the Georgia Department of Banking and Finance,
served in this capacity for four years and has agreed to remain an
active member of the SERT group.
AROUND THE AGENCIES
FDIC: The Federal Deposit Insurance Corporation on Thursday
issued its quarterly Letter to Stakeholders, a report on the agency's
priorities and activities for the second quarter of 2003. FDIC Chairman
Don Powell noted that the agency has focused on stability of the
industry and the insurance funds, sound policy positions and stewardship
of the Corporation. "We also remain hopeful that by year-end, deposit
insurance reform legislation will be a reality," he said. To view the
letter, click here.
FDIC: FDIC announced on Thursday that it has published a Korean
version of its Money Smart financial education curriculum. Since the
program was introduced in July 2001, more than 100,000 people have
completed the course. FDIC introduced a Spanish version of the program
in 2002 and a Chinese version in March 2003. The agency plans to offer a
Vietnamese version later this year. More info...
FRB: The Federal Reserve announced last week that is has
published a Spanish version of two consumer brochures. They are the:
"Consumer Handbook on Adjustable Rate Mortgages" and "What You Should
Know about Home Equity Lines of Credit." Both publications are available
on the agency's Web site. For more information, click here.
FTC: The Federal Trade Commission filed a complaint on Wednesday
against Electronic Financial Group, Inc. in Waco, Texas, and its
principals for providing assistance to fraudulent telemarketers seeking
to drain funds from consumers' checking accounts. FTC alleged that the
company processed transactions through the automated clearing house
network for numerous fraudulent telemarketers and engaged in deceptive
marketing of its own advance-fee debit cards -- the First Freedom
Financial card and the AmeriOne card. FTC noted that the National
Automated Clearing House Association's operating rules prohibit the
processing of ACH transactions on behalf of merchants engaged in
outbound telemarketing to consumers when the merchants have no existing
relationship with the customers. FTC also charged the company with
deceptively marketing a debit card as a credit card and charging
consumers an advance fee of between $80 and $100 as well as a $9.95
monthly service charge. More
FTC: On July 3, the Federal Trade Commission shut down a
fraudulent business opportunity involving mini automated teller
machines. FTC alleged that Merchant Payment Solutions and its principal,
Steven Todd Knight, deceptively marketed and sold mini-ATM business
opportunities to consumers through a Web site and toll-free number
starting in late 2001. FTC said the company claimed that consumers could
earn up to $450 a month by placing a mini-ATM in a location that 500
people per month would visit. Instead, consumers lost significant sums
of money in this venture. The proposed settlement calls for the company
to pay more than $22,000 in consumer redress. For more information, click here.
THE WEEK AHEAD
The Women in Housing and Finance Regulatory Task Force holds a brown bag
lunch to discuss the role of payday lending in today's financial
services industry. Speakers include Helen Howell, Washington State
Director of Financial Institutions; Steven Fritts, FDIC Associate
Director for Risk Management Policy; and William M. Webster IV, Chairman
and CEO, Advance America. - 12 noon, OFHEO, Marianne Wright
Conference Room, 1700 G Street NW.
FDIC is holding a regulatory burden relief banker outreach session in
Denver, CO. Colorado State Bank Commissioner Richard Fulkerson will
provide the welcoming remarks.
The House Financial Services Committee will convene for Federal Reserve
Board Chairman Alan Greenspan's semiannual report on monetary policy. -
10 a.m., 2128 Rayburn Building.
The FDIC hosts a symposium on the Future of Banking: The Structure and
Role of Commercial Affiliation. - 8:30 a.m. to 1:30 p.m., National
The Senate Banking Committee will convene for Federal Reserve Board Alan
Greenspan's semiannual monetary policy report to Congress. - 10 a.m.,
538 Dirksen Building.
CSBS holds its annual strategic planning meeting. - Hotel
The Senate Banking Committee will hold a hearing on "Regulatory
Oversight of Government Sponsored Enterprise Accounting Practices." - 10
a.m., 538 Dirksen Building.
The House Financial Services Subcommittee on Capital Markets, Insurance
and Government Sponsored Enterprises will hold a hearing on H.R. 2575,
the Secondary Mortgage Market Enterprises Regulatory Improvement
Act. - 10 a.m., 2128 Rayburn Building.
"Massachusetts has proven its ability to protect investors as
demonstrated by the $16 million that our Securities Division has
returned to them. We would hope that the federal government would not
prevent that effort. State regulators are the early radar in the
regulatory system. Given recent abuses, now is not the time to diminish
enforcement." - Massachusetts Secretary of the Commonwealth
William Galvin, commenting on provision in a bill, the Securities Fraud
Deterrence and Investor Restitution Act of 2003 (H.R. 2179) that would
curtail states' ability to take enforcement actions against Wall Street
firms that defraud investors. The bill was advanced on Thursday by the
House Financial Services Subcommittee on Capital Markets, Insurance and
Government Sponsored Enterprises.
Mary White, Editor
Teresa Dean, Contributing Writer