"Money frees you from doing things you dislike. Since
I dislike doing nearly everything, money is handy." - Groucho Marx
We were starting to get worried. Someone had purchased a winning ticket
in the Virginia Lottery seven weeks ago, but had not shown up yet to
claim the $239 million jackpot. Even though the Commonwealth of Virginia
could have used the dough, we really wanted it to go to its rightful
owner. No fooling, on April Fool's Day, a 69-year-old truck driver with
his wife of 35 years by his side, came forth to claim their prize. He
chose a lump sum payout, which will total around $100 million once state
and federal taxes are deducted. The winners, J.R. and Peggy Triplett,
appeared yesterday at a news conference, probably something they weren't
accustomed to. Mr. Triplett told reporters that after finding out that
he had the winning ticket, he kept a long-held promise to buy a
tombstone for the grave of a childhood friend who had died many years
ago. Mr. Triplett said he had always been a poor man. But he had been
buying lottery tickets for the past 25 years, just in case luck would
come his way. And it did sometime during the week of Valentine's Day
2004. How sweet it is.
JUMP$TART SURVEY FINDS SLIGHT IMPROVEMENT IN TEENAGE
High school students are becoming slightly more knowledgeable about
financial matters, according to a survey by the Jump$tart Coalition for
Personal Financial Literacy. The survey of more than 4,000 high school
students in 33 states measured 12th graders' knowledge on the basics of
personal finance. On average, students who participated in the 2004
survey answered 52.3 percent of the questions correctly, up from 50.2
percent in 2002 and 51.9 percent in 2000. The survey found parents had a
great role in score results with 58.3 percent of the students saying
they learned financial skills at home, verses 19.5 percent at school,
and 17.6 percent from experience. Nearly 78 percent of the students have
a savings and/or checking account with a bank. There was virtually no
difference in performance by gender, but average scores were higher for
white students than other races. A summary of the survey is available here.
The Conference of State Bank Supervisors is a Jump$Start partner. CSBS
President and CEO Neil Milner encourages all CSBS members to get
involved in a local effort to improved financial literacy education.
"All sorts of financial heartbreaks could be nipped in the bud by
improved financial education. Those of us in the banking industry share
a common responsibility for better consumer education. CSBS commends
Jump$Start for raising public awareness of how important financial
literacy is in this day and age," he said.
HOUSE FINANCIAL SERVICES COMMITTEE GRILL COMPTROLLER
ON PREEMPTION ISSUE; SENATE HEARING SCHEDULED WEDNESDAY
The House Financial Services Committee questioned Comptroller of the
Currency John D. Hawke Jr. for more than two hours Thursday at an
oversight hearing into the OCC's recent rulemaking that exempts national
banks and their operating subsidiaries from state consumer protection
laws and licensing requirements. Next week, the Senate Banking Committee
will hold an oversight hearing into the matter on Wednesday, April
While Committee Chairman Michael G. Oxley (R-Ohio) opened the hearing
with a statement indicating his support of the Comptroller's preemption
ruling, the hearing quickly turned more contentious when Ranking
Minority Member Barney Frank (D-Mass.) began his questioning after the
Comptroller's opening statement. Rep. Frank noted that the OCC had
issued its ruling in spite of requests by Committee members from both
sides of the aisle to wait for Congress to hold a public hearing on the
proposal. He then aired an introductory clip from a videotape featuring
Mr. Hawke touting how his agency could assist banks and insinuated that
the Comptroller's action was intended to lure larger state-chartered
banks to convert to national banks. Frank opined that the OCC should
restrict itself to regulating existing national banks instead of
advertising for national bank conversions. Mr. Hawke replied that many
state banking departments were promoting the state charter's advantages,
including lower examination costs, adding that competition between
charters was "the essence of the dual banking system."
Committee members lined up to protest the Comptroller's decision and the
fact that the rules were finalized in early January while Congress was
in recess. Reportedly 20 or so of the 70 Committee members were present
for the hearing, with twice as many Democrats as Republicans in
attendance. Several bipartisan letters have gone out questioning the
Comptroller's actions. The Committee's Vice Chairman, Rep. Sue W. Kelly
(R-N.Y.) chaired an Oversight and Investigations Subcommittee hearing
into the matter in late January.
Rep. Kelly and Rep. Louis Gutierrez (D-Ill.) announced at Thursday's
hearing they have asked the General Accounting Office to examine the
OCC's preemption decision and its timing.
The transcript from Thursday's hearing is not yet available. Opening
statements from Committee Chairman Michael Oxley and Comptroller Hawke
are posted on the Committee's Web site.
The Conference of State Bank Supervisors is staunchly opposed to the
OCC's preemption rule and sees it as a serious threat to state-chartered
banking. "If OCC is allowed to set national lending standards absent
Congressional action, a state's ability to protect its citizenry is
seriously undermined," CSBS President Neil Milner said.
Idaho Director of Finance Gavin M. Gee will testify on behalf of CSBS at
the Senate Banking Committee oversight hearing next week. Gee is CSBS
immediate past chairman.
HOTEL ROOM BLOCK FOR CSBS 2004 ANNUAL CONFERENCE
If you are planning to attend the Conference of State Bank Supervisors'
2004 Annual Conference next month and have not made your hotel
reservations with the Westin Mission Hills Resort, you should do so
before the cut off date of this Sunday April 4. This is the last day the
hotel will honor our conference group rate of $205. To make your
reservations, please call the Westin Mission Hills Resort at (760)
328-5955. For additional information about the CSBS 103rd annual
gathering, click here.
We look forward to seeing you in Rancho Mirage, CA.
SENATE CONFIRMS NEW HUD SECRETARY
The Senate this week approved the nomination of Alphonso R. Jackson to
be the secretary of Housing and Urban Development. Jackson has been the
acting secretary of HUD since Mel Martinez stepped down in December to
run for a Senate seat in Florida. His nomination will now be voted on by
the full Senate. Jackson was unanimously confirmed by the Senate in June
2001 as HUD's deputy secretary and chief operating officer. In that
position, he managed the daily operations of the $32 billion agency.
Before coming to HUD, Jackson was president of American Electric
Power-TEXAS, a $13 billion utility company in Austin, Texas. To read
Jackson's biography, click here.
AROUND THE STATES
Connecticut: Connecticut State Banking Commissioner John P. Burke
imposed a $100,000 fine on American Express Financial Advisors Inc. The
action settles an investigation into the possible violations of the
Connecticut Uniform Securities Act by American Express Financial
Advisors Inc. The Department of Banking's Securities and Business
Investments Division found that American Express used a wrap
exit/purchase policy that penalized its representatives a $1,000 per
occurrence for moving clients' funds, held less than 36 months, from a
mutual fund to a wrap account. A wrap account is an investment product
that charges a fee based on a percentage of assets under management.
During the investigation, the division also discovered that American
Express provided the agency with inaccurate information. In agreeing to
the settlement, American Express did not admit or deny the
Commissioner's findings. Part of the settlement includes reimbursing 32
representatives $42,000. More information about the action may be found here.
Idaho: Idaho Department of Finance Director Gavin Gee issued a
cease and desist order against a fraudulent credit union on March 22.
The order stops five individuals and one company from fraudulently using
the name of a credit union to solicit consumer loans in Idaho. This is
the second order issued recently by the department against a phony
credit union. The phony credit union used the name "Credit Union One" of
Toronto, Canada. The phony company in Canada is not related to or
endorsed by a legitimate credit union in Michigan that has the same
name. Idaho consumers who responded to the ad were told that as a
condition for receiving a loan, they must provide copies of their
drivers' licenses or Social Security cards and pay $1,450. Idaho
consumers who paid the money were asked to send an additional $465
payment as an "international border tax" premium. Gee said many state
financial service regulators have reported similar instances of phony
credit unions seeking to defraud consumers. The Justice Department and
the FBI are working to end the scam. A press release about the
Department's action is available here.
South Dakota: South Dakota Gov. Mike Rounds has signed
legislation that allows financial institutions to be organized as
limited liability companies. The bill takes effect July 1.
AROUND THE AGENCIES
FDIC: FDIC published its quarterly report profiling the
conditions of banks in each state on Thursday. The report is available
on the FDIC's Web site at http://www.fdic.gov/bank/analytical/stateprofile/index.html.
FFIEC: The Federal Financial Institutions Examination Council on
Wednesday issued revised guidance for examiners, financial institutions
and technology service providers on the risks associated with retail
payment systems. The "Retail Payment Systems Booklet" covers risks and
risk-management practices in such areas as electronic benefit transfers,
card-based electronic payments and automated clearing house
transactions. More information may be found at http://www.ffiec.gov/press/pr033104.htm.
FTC: The Federal Trade Commission received 34,543 complaints
about third-party debt collectors in 2003, which represents more
complaints than any other industry, the agency said in publishing its
report on the Fair Debt Collection Practices Act on March 23. Consumers'
No. 1 complaint in 2003 was repeated calls from collectors. The agency
received 8,559 complaints about frequent calls, up from 4,570 in 2002.
Another 5,650 consumers claimed that collectors used obscene and abusive
language during the calls. The number of consumers saying they received
false threats rose by 41 percent to 3,364. The number of complaints
about collectors calling places of employment also increased by 33
percent in 2003 to 3,101. For more information, click here.
NCUA: National Credit Union Chairman Dennis Dollar announced on
Wednesday that he is leaving his post, effective April 30. Dollar said
he decided to leave after serving a year past the end of his official
term because the "timing is right for me and my family." President
George W. Bush selected Dollar as chairman in 2001. See announcement...
EDITOR'S NOTE: For a more detailed review of regulatory activity,
refer to the Regulatory Newsbytes section of our website.
THE WEEK AHEAD
The House of Representatives is not in session during the spring
district work period.
The FDIC Board will meet in open session. Items on the discussion agenda
include a proposed rule on whether funds underlying stored value cards
qualify as insurable "deposits"; a proposed rule on medical privacy
regulations under the Fair and Accurate Credit Transactions Act of
2003. - 10 a.m., FDIC Headquarters 6th Floor Board Room, 550
Seventeenth Street NW, Washington, DC.
The Senate Committee on Banking, Housing, and Urban Affairs will meet in
open session to conduct a hearing on "The Review of the National Bank
Preemption Rules." The hearing will feature testimony from Comptroller
of the Currency John D. Hawke Jr., Idaho Director of Finance Gavin M.
Gee, North Carolina Attorney General Roy Cooper, Center for Responsible
Lending CEO Martin Eakes, Consumer Bankers Association President Joe
Belew, George Washington University Associate Professor of Law Art
Wilmarth, Secura Group Chairman William M. Isaac, National Association
of Realtors President Walt McDonald, and American Bankers Association
Director of Regulatory and Trust Affairs James McLaughlin. - 2 p.m., 538
The Senate Committee on Banking, Housing, and Urban Affairs will hold
the 10th in a series of hearings on current investigations and
regulatory actions regarding the mutual fund industry. This hearing will
focus on the views of the Securities and Exchange Commission. SEC
Chairman William H. Donaldson is scheduled to testify. - 10 a.m., 538
CLOSING COMMENTS. . .
"It is not in the interest of the financial community to use your muscle
to push something through that is inherently unstable because of the
degree of resistance it has engendered." -- Rep. Barney Frank (D-Mass.),
Ranking Minority Member of the House Financial Services Committee, as
quoted in Thursday's edition of CongressDaily's article on the
Committee's hearing on the OCC's recent decision to exempt national
banks and their operating subsidiaries from state laws and
Mary White, Editor
Teresa Dean, Contributing Writer